OSTK (Overstock.com Inc) did indeed go on to print a large bearish engulfing candlestick today, closing down over 9% and providing the first decent sell signal on the daily time frame since the stock embarked on a parabolic rally back in early August. As parabolic advances typically don’t end well, here are some additional potential price targets for this trade. These are unofficial & unadjusted (i.e.- actual support levels, best to set any BTC limit orders slightly above) targets at this time although one or more additional targets might be added to this trade depending on how the charts develop going forward.
OSTK daily Nov 27th
One of the things that I will be looking for is follow-through with one or more additional red closes to help validate today’s bearish engulfing candlestick as a likely topping stick. Shortly before the close I posted the following 5-minute chart showing a bearish pennant continuation pattern with a measured target of around 54.50. Should that pattern continue to play out in the coming trading sessions, that would be a drop of another 6% from where the stock closed today & help confirm the bearish nature of today’s engulfing candle on the daily time frame.
OSTK 5-min Nov 27th