Question $50$

$1$ pts

A trader uses both Bollinger Bands $($with a $20-$day moving average and $2$ standard deviations$)$ and a Zscore $($calculated over the same $20-$day period using the same moving average$).$ If the price touches the upper Bollinger Band and the Z$-$score is significantly above zero, what might this suggest?

A strong confirmation of an overbought condition and a high probability of a price reversal.

The price is experiencing higher than usual volatility and is trading at a statistically high level relative to its recent average.

The Bollinger Bands are providing a false signal, and the Zscore is the more reliable indicator in this situation.

The stock is likely entering a period of consolidation within the Bollinger Band range.