Most of the investors recently have been curious over the performance of Overstock.com, Inc. (NASDAQ:OSTK) stock. At the end of the day, it’s only a stock’s performance that matters. With this in mind, it’s worth taking a look at the chart to get a sense of where it might be headed in the future.
How has the stock performed recently?
Overstock.com, Inc. (NASDAQ:OSTK) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of OSTK has increased +69.68%. Shares are now up over the past year, outperforming the broad market by -100% and outperformed a peer group of similar companies by 785%. After the latest session, which saw the stock close at a price of $77.80, OSTK sits below its 52-week high.
Of course, these surface-level price movements don’t tell us much about the direction that OSTK may be headed in the future. In order to predict this, technical analysts look at momentum indicators, which measure the speed and magnitude of these price movements. The idea is that as momentum slows, it may signal the approach of key support or resistance levels and a reversal of recent trends. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for OSTK is 65.62%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 72.22%, tells a different story, and suggests that OSTK currently trades in overbought territory.
What do the trading volumes reveal?
Analysts use volume trends to assess the level of conviction behind a stock’s price changes. When volumes suddenly increase above normal levels, it can be a sign that investors feel very strongly in one way or the other about the future direction of a stock, or may even have access to inside information. Overstock.com, Inc. (OSTK) average trading volume of 5,024,970 during the past month is 274.11% above its average volume over the past year, indicating that investors have been more active than usual in the stock in recent times.
What do the analysts think?
OSTK is currently undervalued by -8.47% relative to the average 1-year price target of $85.00 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 1.00, which implies that analysts are generally bullish in their outlook for OSTK over the next year.
How risky is the stock?
No study on the valuation of a stock is complete without taking into account risk. When analyzing the systematic risk associated with a stock, analysts look at beta, which measures the stock’s volatility relative to the overall market.
Overstock.com, Inc. (NASDAQ:OSTK) has a beta of 1.41, compared to a beta of 1 for the market, which implies that the stock’s price movements are more extreme than the market as a whole. OSTK therefore has an above average level of market risk. During the past couple of weeks, OSTK average daily volatility was 89.66%, which is 17.16 percentage points lower than the average volatility over the past 100 days.