Yesterday, we looked at a Monthly Price Chart of Netflix, Inc., noting the stock’s 1-Month Price is trading above the 10-Month SMA.
Today’s chart is for Chewy Inc. (NYSE: CHWY).
Chewy, Inc., together with its subsidiaries, engages in the pure-play e-commerce business in the United States.
The company provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its chewy.com retail website and mobile applications.
Now, the Daily Price Chart below shows that CHWY is in a price uptrend because the current price of CHWY is trading higher than it was exactly six months ago.
We know this thanks to the On Balance Volume (OBV) Chart, shown below the Daily Price Chart.
Here’s what you need to know about the OBV Line: it measures how much volume is either pushing the stock up, or down. Meaning, the volume of stock that’s being sold or bought.
Using a stock’s volume in this way can confirm an uptrend by reflecting that more people are buying the stock than are selling it (or vice versa for an downtrend). Take a look at the chart below…
We can see from the OBV chart shown above that the OBV line for CHWY is sloping up.
An up-sloping line indicates that the volume is heavier on up days and buying pressure is exceeding selling pressure.
Buying pressure must continue to exceed selling pressure in order to sustain a price uptrend.
So, OBV is a simple indicator to use that confirms the price uptrend and its sustainability.
The numerical value of the OBV line is not important. We simply want to see an up-sloping line to confirm a price uptrend, which is displayed in the chart above.
We’ll be sure to keep following Chewy, Inc. as the stock’s buying pressure exceeds it’s selling pressure and the price uptrend continues.
Additionally, we’d like to talk about how a previous Chart of the Day stock has done…
The Power of Options
On June 2, we highlighted CrowdStrike Holdings, Inc. (NASDAQ: CRWD), noting that CRWD’s OBV line was sloping up.
If you happened to have purchased CRWD shares on that day, you’d already be up 11.61%.
But… if you had purchased the right option contract, you would be up 33.9% in just three weeks’ time!
That’s the power of options.
Editor, Chart Of The Day