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Bargain retail stocks due for a recovery

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Bargain retail stocks due for a recovery

Retail inventory discount Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) has been on a prolonged decline since the December 20 level, a three-year high of $120.00. The stock fell 1.3% at last glance to $99.93 and is heading for its ninth loss in the past eleven sessions.

However, the 126-day moving average, which represents the trading value of half a year, seems to provide support today. And given its history as a bullish trendline for the stock, it could provide OLLI with an entry point soon.

According to Schaeffer’s Senior Quantitative Analyst Rocky White, shares of Ollie’s Bargain Outlet have come within striking distance of their 126-day moving average after an extended period above (defined by White as 80% of the time in the last two months and 8 of the last months). 10 trading days) five other times in the last three years. The stock was higher a month later on 60% of these signals, with an average gain of 5.2%.

OLLI January 14

The stock’s ‘oversold’ condition also points to a potential near-term recovery. Specifically, OLLI’s 14-day relative strength index (RSI) of 16.5 is firmly in this area.

In the meantime, options appear to be a good way to consider the stock. The 34% Schaeffer’s Volatility Index (SV) is in the 16th percentile of its annual range, meaning options traders are pricing in low volatility expectations.

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