Ollie's Bargain Outlet (OLLI) has been climbing and climbing in its limited history. We looked at the price action for OLLI at the beginning of September, reasoning that a correction would develop, giving us a better buying opportunity.
With hindsight, we can see that OLLI did dip, but not as much as we had projected. Prices declined to $24, found fresh buying interest and stabilized until early November when a new mark-up phase got underway.
In this daily bar chart of OLLI, below, we can see that after a September dip, OLLI traded sideways until early November. Prices moved sideways and crisscrossed the flat 50-day moving average line, while the On-Balance-Volume (OBV) line declined. This pattern is normally weak -- and yet prices did not decline.
In early November, prices shoot higher with a rising OBV line. A three-month period of consolidation follows before renewed gains. This month, the gains in OLLI have accelerated, with prices moving away from the rising 50-day moving average line and the OBV line confirming the advance. The MACD oscillator is in a bullish configuration above the zero line.
In this limited weekly chart of OLLI, above, we can see that prices are above the rising 40-week moving average line. The weekly OBV line has made a new high for the move up, confirming the price gains with volume strength. The weekly MACD oscillator just turned up to a fresh go long signal.
Bottom line: OLLI is pointed higher. Longs should consider raising sell stop protection to a close below $31.