Ollie's Bargain Outlet Holdings Inc. (OLLI) has done very well since we last paid the store a visit. At that time, we said, "OLLI is pointed higher. Longs should consider raising sell stop protection to a close below $31." Over the past six months OLLI rallied strongly to above $46 and it never approached our suggested sell-stop. Now what? Let's check the updated charts and indicators to see how we should adjust our strategy.

In this daily bar chart of OLLI, below, we can see after the strong January-to-August rally that prices have leveled off in the $42-$47 area. Prices have been crossing above and below the cresting 50-day moving average line. The 200-day moving average line is still rising and below the price chart.

The On-Balance-Volume (OBV) line peaked in June and has been slowly weakening. A declining OBV line happens when the volume of trading is heavier on days when the stock closes lower and is a sign of aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator peaked in early May and has been making lower highs since, while prices have made higher highs. The oscillator is currently below the zero line for a sell signal.

In this weekly chart of OLLI, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line peaked in June/July and has lost ground. The weekly MACD oscillator gave a take-profits sell signal in early August and is still pointed down.

In this Point and Figure chart of OLLI, below, we can see a consolidation pattern with an upside price target of $49.10. A rally to $45.73 would strengthen this chart and a decline to $42.65 would weaken it.

Bottom line: The indicators on OLLI might be called mixed at best, but the declining OBV lines are telling me to raise sell-stop protection to a close below $41 and I would have no problem if traders booked some profits.

Is Your Wallet Ready for Black Friday?

Editors' pick: Originally published Nov. 17.

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