what are wide ranging days 
wide ranging days describe the price range of a stock on a particularly volatile day of trading wide ranging days occur when the high and low prices of a stock are much further apart than they are on a typical day some technical analysts identify these days by using the volatility ratio understanding wide ranging dayswide ranging days have a true range that is larger than the surrounding days and wide ranging days usually predict a trend reversal extreme wide ranging days signal major trend reversals while less extreme wide ranging days signal minor reversals the average true range atr provides a way to compare the trading range between multiple days by looking at the difference between the current low minus the close of the previous period the absolute true range for a given period is the greater of the high for the period minus the low for the period the high for the period minus the close for the previous period or the close for the previous period minus the low for the current period the average true range is usually a 14 day exponential moving average ema of the true range although different trades may use different periods an exponential moving average is a type of moving average that places a greater weight and significance on the most recent data points this is also referred to as the exponentially weighted moving average after a sharp down trend a wide ranging day with a strong close close near the high of the day is a signal that the trend will reverse meanwhile after a strong advance a wide ranging day with a weak close close near the low of the day signals a downside reversal special considerationsthe volatility ratio can be used to identify wide ranging days using a technical indicator in essence this automates the process of finding wide ranging days and makes it possible for traders to easily screen for opportunities rather than simply looking at charts the volatility ratio is calculated by dividing the true range for a given day by the exponential moving average of the true range over a period which is usually 14 days in general wide ranging days occur when the volatility ratio exceeds a reading of 2 0 over a 14 day period traders may use volatility ratios in their stock charts when looking for potential reversal opportunities wide ranging days occur when the price range of a particular stock greatly exceeds the volatility of a normal trading day oftentimes these days are measured with the average true range and analysis is automated using the volatility ratio wide ranging days usually predict trend reversals although traders should confirm reversals using other technical indicators and chart patterns investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal 