Bollinger Bands consist of three lines: a middle band (20-period SMA), an upper band (SMA + 2 standard deviations), and a lower band (SMA - 2 standard deviations). When price touches the upper band, the stock may be overextended. When it touches the lower band, it may be oversold.
Band width shows volatility. When the bands contract (called a "squeeze"), it signals that volatility is low and a breakout is likely coming. Traders watch for the direction of the breakout to time their entry.
When the bands expand, volatility is high and the stock is making a strong move. A price that "walks the band" — staying near the upper band for an extended period — is in a strong uptrend and should not be shorted just because it is touching resistance.
On StockifyX, click "BB" on any stock chart to overlay Bollinger Bands. Combine with volume: a breakout from a squeeze on high volume is far more reliable than one on low volume.