Bargain Hunting Opportunity Emerges in Ollie’s Stock
Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) has been on a downward spiral since reaching its three-year high of $120.00 on December 20. With the stock currently trading at $99.93, down 1.3%, it’s poised to mark its ninth loss in the last 11 sessions. However, a key technical indicator suggests that the stock may be due for a rebound.
Support from the 126-Day Moving Average
The 126-day moving average, which represents half a year’s worth of trading, appears to be providing support for OLLI today. Historically, this trendline has been a bullish indicator for the stock, and it could soon provide a launching pad for a potential upswing.
Past Performance Suggests Upside Potential
According to Schaeffer’s Senior Quantitative Analyst Rocky White, OLLI has come close to its 126-day moving average five other times over the last three years after a prolonged period above it. In 60% of these instances, the stock was higher one month later, with an average gain of 5.2%.
Oversold Condition Points to Short-Term Rebound
The stock’s current “oversold” condition, as indicated by its 14-day relative strength index (RSI) of 16.5, also suggests a potential short-term rebound. This reading is firmly in oversold territory, implying that the stock may be due for a bounce.
Options Trading Opportunity
Options traders may also find value in OLLI, as its Schaeffer’s Volatility Index (SV) of 34% ranks in the 16th percentile of its annual range. This indicates that options traders are pricing in low volatility expectations, making it an attractive time to consider options trading strategies.
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