10/24/2022
Price targets have been inching lower while bankruptcies and delistings have become a regular thing…
But what if I told you that one discount store is receiving analyst upgrades despite being down about ~50% YTD?
Thanks for that, Ron Howard.
I’ve never been in the store, however, I know the one here in town stays busy from open to close…
lt’s worth a look. Here’s Ollies Bargain Outlet Holdings, Inc. (OLLI):
We’re on the daily with this one.
The signals on this boast a 63% win rate with a 1.7 profit factor — that’s the kind of combination that’s hard to come by in this market.
Keep reading…
I want to keep the analysis simple.
The key here is this: Higher highs. Higher Lows.
In other words, the chart has begun an upward trend… The number of higher highs and lows to confirm a move is entirely up to the trader and their time horizon, so I’ll let you decide.
First, let’s look at the moving averages. I’ve tagged the 50sma and the 200sma on the chart.
The faster moving average (50sma) may be pointing down toward the slower (200sma), but that rarely tells the whole story…
Notice that after the initial crossing to the left, the chart began regrouping and consolidating where it currently sits — also an area of previous Resistance.
What I like here is the sideways movement above the 200sma.
Next is the Fibonacci Extension I’ve drawn in…
The way this works is by using the higher low as a starting point for Fibonacci levels in an uptrend and, if you look closely, you can see the dotted line marking the trend prior to the levels being plotted on the chart.
By now, you know I love the 61.8% level… and when a stock climbs above this level, on this kind of setup, I’ll often buy near the 61.8%.
Hell, with enough 21-year Suntori, I may just get a 61.8% tattoo… (doubtful).
I digress…
I’ve added in a chart analog for comparative purposes and forward-looking measurements (white bar pattern).
Interestingly enough, the initial rise out of the hole looks almost identical.
I guess the robots aren’t but so random…
But notice that this places it at two key levels: Resistance (red block) and Untested Supply.
The former is in line with the Fibonacci Extension target.
Finally — and I can’t skip over this — the Alpha Waves tool via Chris Hood shows a composite Stochastic breaking above the zero line and pointing higher.
The dots are a mixed bag, of course… But you expect this in consolidation periods.
Watch for a move to the upside.
Keep moving,
(Disclosure: I hold no position in PRPL but intend to initiate a position in the next 30 days.)
This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
