Bollinger band indicator uses three lines

The Bollinger Bands
Bollinger band indicator uses three lines: the upper, lower and simple moving average (SMA), which is between these two things. The upper / lower bands are plotted two standard deviations away from the SMA.
Standard deviation is a measure of volatility, therefore, Bollinger bands adjust to market conditions. When the markets become more volatile, the bands expand and they contract during less volatile periods.
The closer the prices move to the upper band, the more overbought the stock is. The closer the prices move in the lower band, the more oversold the stock is. Below is an example using General Electric (GE). Bollinger bands are blue for the lower band, green for average and red for the upper range:
We have circled three key points of this table. The blue circle is where the stock price began to create a "base" of the lower band - it seems that the stock was oversold.
Buying at this point would be a wise choice, as the stock proceeded to jump 20% or more in the next few weeks. The two red circles are areas where the stock price was touching or breaking through the upper red band.
This is usually an indication that the stock is overbought. In both cases, the shares fell significantly in the coming weeks.
Bollinger bands are a good tool to use, but as we have been saying all along, you should never invest based solely on what just one indicator says. Notice that there were instances when the stock touched the upper or lower band and did not react.
Rather than basing their investment decisions on Bollinger bands, many investors use this indicator to confirm a decision they are about to make.