Interesting Moving Average Situation on Overstock.com (OSTK)
06/19/2009 12:01 am EST
Overstock.com (OSTK), the online retailer that seems to be constantly fighting a battle against short sellers, has an interesting moving average situation occurring on the daily chart.
The downsloping 200-day moving average has come down to meet the rising 50-day moving average to form an almost perfect consolidation triangle.
In the past few days, the candles have soundly broken down through the 50-day moving average and with the exception of one strong up day, would appear to be losing steam.
I would expect OSTK to move up and test the 200-day moving average once more. If it breaks through, it could be a sign that the stock will move higher for another week, but if it doesn’t, and bounces off the resistance of that critical moving average, expect OSTK to head lower once again.
If it does head lower, support appears to be in the $9.00 range at the lows previously reached back in late March.
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By Tim Bourquin, Trading Content Director, MoneyShow.com