PreMarket Prep Nails Overstock's Move Higher: 'This Stock Looks Sleepy'

Zinger Key Points
  • Co-host Dennis Dick was spot-on with this initial comment on Overstock Monday: “This stock looks sleepy.”
  • In other words, Overstock moved incrementally higher, but closed up toward resistance on Friday, which often can be a good sign.

Several growth technology have made substantial comeback in 2023, but a few have not fully participated in the rally. One of those issues is Overstock.com Inc OSTK, which is the PreMarket Prep Stock of the Day.

Overstock Once A High Flier: Similar to many other stocks in its sector, the online retailer exploded in price and peaked a few months into the pandemic, when it reached $128.50 in August 2020. It weakened to end that month at $87.80 and embarked on an extended decline.

Find Overstock news, price action, analyst ratings and more here.

Overstock Finds A Bottom: The last leg of its retreat took place in December 2022 as investors took advantage of their losses for tax purposes. While it appeared Overstock had found support when it put in a trio of lows in the lower $18 handle ($18.07-$18.39) from Dec. 27-29, the stock had a major shakeout on the second trading day of the year.

Following a flat open ($18.33), the issue spiked down to $17.05, a full dollar below the former low, and rallied back to close at $18.46. The bears made attempts to revisit that low in the next two session, but found buyers at $17.73 and $17.53, respectively.

Until Monday’s session, the high for the rebound came last week at $21.78. The closing high from the rebound was made on Friday at $21.41. 

PreMarket Prep's Take: When the issue was being covered on the show Monday, it was trading slightly higher than Friday’s close at $21.50 area.

Co-host Dennis Dick was spot-on with this initial comment: “This stock looks sleepy.”

In other words, Overstock moved incrementally higher, but closed up toward resistance on Friday, which often can be a good sign.

“I like it over $22,” Dick said. 

The author of this article drilled down on the technicals a bit deeper. Investors were alerted to a a quad of highs from $21.33 to $21.78 over the last six sessions. That coincided with the previously mentioned $22 level.

OSTK Price Action: Following a higher opening, Overstock made a brief dip just under the close ($21.41), reaching $21.29, and resumed its move higher. It briefly paused at the noted resistance level and finally pushed through. In fact, it raced to $22.59 in the first hour of the session.

The issue found some short-term profit takers at the area, but then hovered near the highs for the session. If the rally continues, the daily high comes in at the stock's Dec.14 high of $22.96. The stock ultimately closed at $22.26. OSTK12323

The discussion on the issue from Monday’s show can be found here:

Photo via Shutterstock.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: Small CapTop StoriesPreMarket Prep
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!