Supply and Demand with Overstock.com

Yesterday, we looked at a Daily Price Chart of Teradyne, Inc., noting the stock has been making a series of 52-week Highs since mid-June.

Today’s chart is for Overstock.com Inc. (NASDAQ: OSTK).

Overstock.com, Inc. operates as an online retailer in the United States and internationally. It operates through Retail, tZERO, and Medici Ventures segments. The company offers furniture and home décor — including rugs, bedding and bath, home improvement, kitchen items, and other related products. It also operates Worldstock Fair Trade, a store that provides handcrafted products; and Supplier Oasis, a single integration point for partners to manage their products, inventory, and sales channels, as well as obtain multi-channel fulfillment services through its distribution network.

Now, the Daily Price chart below shows that OSTK is in a price uptrend because the current price of OSTK is trading higher than it was exactly six months ago. The On Balance Volume (OBV) chart is shown below the Daily Price Chart.

On Balance Volume measures volume flow with a single easy-to-read line. Volume flow precedes price movement and helps sustain the price uptrend. When a stock closes up, volume is added to the line. When a stock closes down, volume is subtracted from the line. A cumulative total of these additions and subtractions form the OBV line.

chart

We can see from the OBV chart shown above that the On Balance Volume line for OSTK is sloping up. A 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, On Balance Volume is a simple indicator to use that confirms the price uptrend and its sustainability.

The numerical value of the On Balance Volume line is not important. We simply want to see an up-sloping line to confirm a price up trend, which is displayed in the chart above.

We’ll be sure to keep following Overstock.com 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 30, we highlighted MarketAxess Holdings Inc. (NASDAQ: MKTX), noting that MKTX’s 50-Day EMA was trading above the 100-Day EMA signaling a bullish trend for the stock.

If you happened to have purchased MKTX shares on that day, you’d already be up 7.4%.

But… if you had purchased the right option contract, you would be up 47.1% in just three weeks’ time!

That’s the power of options.

Best Regards,

Chuck Hughes
Editor, Chart Of The Day

Chuck Hughes

Written By Chuck Hughes

Before Chuck Hughes won 10 Trading Championships, he was an accomplished Air Force pilot. In fact, he credits his success as a stock and options trader to his disciplined upbringing and career. When he was deciding between a career in the Navy and a career in the Air Force, the Navy told him he’d only have a 33% chance of flying jets. The Air Force gave him 100%. He liked those odds better. 35 years ago, Chuck had a wife, a young daughter, a son on the way, and a huge mortgage to afford. He didn’t want to give up on his lifelong dream and stop flying for a major commercial airline. He knew he needed to supplement his income during the 15 days a month he wasn’t flying. So he used his experience in discipline and math, and his understanding of finance and the stock markets (which he’d always been interested in,) and opened a $4,600 trading account. He made over $460,000 in profits his first two years of trading, and he hasn’t looked back since. When he was diagnosed with Meniere’s disease 15 years later, which commonly leads to vertigo…He knew his career as a pilot wouldn’t last much longer with those odds. But he didn’t have to scurry to find another gig, or panic about how his family would eat… He’d spent the last 15 years perfecting his system and raking in cash. As an options trader, Chuck does not let his emotions get in the way of his trading strategy. He adheres to disciplined and methodical options and stock trades. Because he respects the options game so highly, and understands the true freedom that financial solvency can bring, Chuck was able to design and refine his system and win those 10 Trading Championships. Put simply, Chuck Hughes’ trading strategies work, and in all types of market conditions. They’ve worked throughout the bull, bear, and flat markets America has seen in the last 30 years. Chuck Hughes has spent that time building a reputation as one of the most trustworthy options traders in the industry. His publishing group Legacy Publishing LLC was one of the few trading groups on the planet to have correctly predicted and profited from the 2008 financial crash .As a published author 16 times over, a 10-time Trading Championship winner, and an options-trading teacher for 25 years, he’s learned to trade and teach without an ego.