Another look at Volatility

In the previous post Sector Technical Analysis: Volatility - not over yet ? we looked at the 20 week Bollinger bandwidth reading of the Nifty index and determined that volatility is not over and could soon show its ugly head and it did. Now again the Nifty 20 week Bollinger Bandwidth is below 10% but this time let us compare it with its broader indices such as Nifty 100,200 & 500.

In a more than 10 year history this has rarely occurred but when it did, we saw some explosive moves either side. However this is not to be seen from 1 data point and this phenomenon could last a few more weeks as it did in Feb-Mar 2014. Looks like the market could frustrate everyone in the coming few weeks and then show its direction.