Overstock.com Inc (NASDAQ: OSTK)

Overstock.com, Inc. operates as an online retailer in the United States. The company operates through two segments, Direct and Partner. It offers brand name, non-brand name, and closeout products, including furniture, home decor, bedding and bath, housewares, jewelry and watches, apparel and designer accessories, health and beauty products, electronics and computers, and sporting goods, among other products; and sells various books, magazines, CDs, DVDs, and video games.

Take a look at the 1-year chart of Overstock (NASDAQ: OSTK) below with my added notations:

1-year chart of Overstock (NASDAQ: OSTK)

Since its January peak, OSTK seems to have formed a clear, trend line of resistance (red). That trendline of resistance is currently approaching $62, and a break above that line should mean higher prices, overall, for the stock. The hold of the key level at $60 (green) could be a sign of the trendline break coming.

The Tale of the Tape: OSTK has a down trending resistance. A break above that resistance should mean higher prices for the stock, thus a long trade could be made.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT