Listen to Steve

A LOOK BACK AT MY FREE STOCK PICK SENT OUT ON
SEPTEMBER 1ST...4 WEEKS AGO

Overstock.com Inc (OSTK)
Broke above Upper Float Line on August 30th, 2006,
(See all 3 Charts Below)

When a stock's price has been in a long decline and then rises far enough to penetrate its upper float channel line, there are three possibilities ahead.  1) The most likely possibility is that the upper float channel line will act as resistance and the price will immediately head lower.  2) The second possibility is that as the price moves lower it will find support at either its 50% float channel line (which is dotted on the charts) or its lower float channel line (which is the solid line).  If this happens there is a strong probability that the stock will put in a bottom and the long term trend will change from down to up.  3) The third possibility is that the upper float line has lost all resistance capability and the price will easily continue to move higher.  This is the least likely scenario.  Thinking that a penetration of the upper float line is a buy signal is a mistake and will easily lead to losses in your portfolio.

So what did Overstock.com do?  It found support first at its 50% float line, bounced from there, then came down again and found support at its lower float channel line.  Breaking out, pulling back, finding support, and moving higher is how most stocks make a bottom (See Chart 2 Below).

So what will Overstock do now?  You never ever truly know what a stock will do tomorrow.  This is because stock movement is not a mechanical process.  Stocks move based on the decisions of human beings and predicting human decisions is never certain.  If a large number of the people owning Overstock.com were to decide tomorrow that they wanted to sell then the stock could easily sell off.  If a large number of people decide to buy Overstock.com then the stock could easily blast higher. 

From a purely Float Chart technical analysis point of view, the stock 'looks like' it will head higher from here.  But as always ONLY TIME WILL TELL.

STUDY THE 3 CHARTS BELOW 
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Good Trading to You.

THIS IS HOW THE STOCK LOOKED WHEN I SENT IT OUT IN MY FREE WEEKLY REPORT ON SEPTEMBER 1ST.

THIS IS HOW THE STOCK LOOKS NOW.  NOTE THAT I'VE KEPT THE FLOAT BOX AT THE BREAKOUT POSITION.  SEE THE THIRD CHART BELOW FOR HOW THE FLOAT CHART ACTUALLY LOOKS AS OF YESTERDAY'S CLOSE (10/6/06).
 

THIS IS HOW THE STOCK LOOKS NOW AS OF YESTERDAY'S CLOSE ON OCTOBER 6, 2006.  NOTE HOW THE FLOAT BOX IS ON THE FAR RIGHT OF THE CHART.  THE CURRENT BOX IS ALWAYS IN THIS FAR RIGHT POSITION.  THE STOCKSHARE V2 SOFTWARE (BUY IT ON OUR HOMEPAGE) ALLOWS THE USER TO DRAG THE FLOAT BOX INTO PAST TIME FRAMES.

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