Overstock.com, Inc. (OSTK) shares rose more than 7% during Thursday's session after the company posted better-than-expected financial results. Revenue fell 4.4% to $351.57 million, beating consensus estimates by $19.27 million, while net losses reached 40 cents per share, which was 32 cents per share better than analysts were expecting to see.
In addition to the first quarter results, the company said that April sales to date were up 120% year over year thanks to strong demand for home furnishings as customers shop from the safety of their own homes. The online-only platform and partner network of more than 4,500 drop ship facilities has helped it meet the surging demand.
The company's blockchain efforts experienced little interruption from the COVID-19 crisis thus far, although management recognized the potential risks to the platform due to overall market depression, ongoing volatility, and delays in trading and capital raises in the current environment. In the meantime, the company continues to expand integrations.
Overstock.com's success follows other online home goods retailers, such as Wayfair Inc. (W), which has seen its shares rise sharply over the past few weeks.
From a technical standpoint, Overstock shares extended their breakout to the highest levels since late 2019. The relative strength index (RSI) moved further into overbought territory with a reading of 73.73, but the moving average convergence divergence (MACD) continued its bullish move higher. These indicators suggest that the stock could see consolidation before moving higher.
Traders should watch for consolidation above trendline support and the 200-day moving average at $10.83 over the coming sessions. If the stock moves lower, traders could see a move toward reaction highs and the 50-day moving average at around $6.75 over the coming sessions, although that scenario appears less likely to occur given the bullish sentiment.
The author holds no position in the stock(s) mentioned except through passively managed index funds.