Ollie’s Bargain Outlet Holdings, Inc. is a holding company, which engages in the retail of closeouts, excess inventory, and salvage merchandise.
Take a look at the 1-year chart of Ollie’s Bargain Outlet Holdings (NASDAQ: OLLI) with the added notations:
OLLI has formed an important level of support at $55 (green) over the past 5 months. The stock had rallied to multi-month highs back in December, but now that it has fallen back down, the $55 level is acting as support again. If the $55 support were to break, lower prices should follow for OLLI.
The Tale of the Tape: OLLI has key support at $55. A trader could enter a long position at or around $55 with a stop placed under the level. If the stock were to break below the support, a short position could be entered instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT