Author: Rick Pendergraft, Trades Of The Day

The weekly stochastic indicators are in oversold territory for only the third time since the beginning of 2019. In each of the two previous instances, the stock has rallied sharply over the next few months.

On Friday and the stochastic indicators made a bearish crossover out of overbought territory. Other instances of this pattern over the last four months or so and it has been a pretty good bearish indicator.

It’s my “Option Trade of the Day”.

The underlying stock has been in a downward sloped trend since January. At the trend line now, the stochastic indicators are in overbought territory and have made a bearish crossover.

Year to date, it’s been in a slight downtrend and it hit the high a few days ago.