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.
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.
Editor, Chart Of The Day