These trading bands are used by technical analysts to define a stock's upper and lower boundaries. Signals to sell occur when the stock price reaches the upper band, and buy signals are generated when the price reaches the lower band.
The reasoning behind the sell and buy signals is that stock prices tend to bounce off the bands. Even though buyers and sellers will temporarily pressure a stock's price to its extremes, it should re-stabilize to more realistic levels found within the envelope.
Investment dictionary. Academic. 2012.
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envelope — en‧ve‧lope [ˈenvələʊp ǁ loʊp] noun [countable] a thin paper cover in which you put a letter ˌpadded ˈenvelope an envelope filled with soft material that is used for sending things which can easily be damaged ˌself adˌdressed ˈenvelope written… … Financial and business terms
Envelope — En vel*ope (?; 277), Envelop En*vel op (?; 277), n. [F. enveloppe.] 1. That which envelops, wraps up, encases, or surrounds; a wrapper; an inclosing cover; esp., the cover or wrapper of a document, as of a letter. [1913 Webster] 2. (Astron.) The… … The Collaborative International Dictionary of English
envelope — ► NOUN 1) a flat paper container with a sealable flap, used to enclose a letter or document. 2) a covering or containing structure or layer. 3) the outer housing of a vacuum tube, electric light, etc. 4) the structure within a balloon or non… … English terms dictionary
envelope — [än′və lōp΄, en′′və lōp΄] n. [Fr & OFr enveloppe < OFr envoluper: see ENVELOP] 1. a thing that envelops; wrapper; covering 2. a folded paper container as for a letter, usually with a gummed flap for sealing 3. a) the outer covering of a rigid… … English World dictionary
Envelope — [engl.], Hüllkurve … Universal-Lexikon
envelope — 1705, from Fr. enveloppe (13c.), a back formation from envelopper to envelop (see ENVELOP (Cf. envelop)) … Etymology dictionary
envelope — s. m. Envoltório para cartas ou outros documentos ou papéis. = SOBRECARTA, SOBRESCRITO ‣ Etimologia: francês enveloppe … Dicionário da Língua Portuguesa
envelope — [n] wrapper bag, box, case, casing, cloak, coat, coating, container, cover, covering, enclosure, hide, jacket, pocket, pouch, receptacle, sheath, shell, skin, vesicle, wrapping; concept 494 … New thesaurus
Envelope — This article is about envelopes in packaging. For other uses, see Envelope (disambiguation). Front of an envelope mailed in the U.S. in 1906, with a postage stamp and address … Wikipedia
envelope — noun ADJECTIVE ▪ bulky, fat, thick ▪ large, small ▪ sealed ▪ return (AmE), self addressed … Collocations dictionary
envelope — n. 1) to address; seal an envelope 2) a pay envelope (AE; BE has pay packet) 3) a self addressed; stamped; window envelope USAGE NOTE: AE has stamped self addressed envelope; BE has stamped addressed envelope. * * * [ envələʊp] seal an envelope… … Combinatory dictionary