Apr 29, 2021

SOPA Images/LightRocket via Getty Images Overstock.com (NASDAQ: OSTK) , an online closeout retailer offering discount brand name merchandise, including bed-and-bath goods, home decor, kitchenware, watches, jewelry, electronics and computers, sporting goods, apparel, and designer accessories, experienced almost a 6% gain over the last week (five trading days) to levels of around $71 currently. But will the company’s stock see higher levels over the coming weeks, or is a decline in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price, returns for OSTK stock average around 16.5% in the next one month (twenty-one trading days) period after experiencing a 6.2% rise in a week. But how would these numbers change if you are interested in holding Overtsock.com for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Overstock.com stock chances of a rise after a fall . You can test the chance of recovery over different time intervals of a quarter, month, or even just one day! MACHINE LEARNING ENGINE – try it yourself: IF OSTK stock moved by -5% over five trading days, THEN over the next twenty-one trading days, OSTK stock moves an average of 4.1%, which implies an excess return of 2.7% compared to the S&P500. Average Return For OSTK Stock Trefis More importantly, there is a 46% probability of a positive return over the next twenty-one trading days and a 41% probability of a positive excess return after a -5% change over five trading days. MORE FOR YOU Question 1: Is the average return for Overstock.com stock higher after a drop? Answer: Consider two situations, Case 2: Overstock.com stock rises by 5% or more in a week Is the average return for Overstock.com stock higher over the subsequent month after Case 1 or Case 2? Overstock.com stock fares better after Case 2, with an average return of 4.1% over the next month (twenty-one trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 14.3% for Case 2. In comparison, the S&P 500 has an average return of 3.1% over the next twenty-one trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise . Try the Trefis machine learning engine above to see for yourself how Overstock.com stock is likely to behave after any specific gain or loss over a period. Question 2: Does patience pay? Answer: If you buy and hold Overstock.com stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong. Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks! You can try the engine to see what this table looks like for Overstock.com after a larger loss over the last week, month, or quarter. Question 3: What about the average return after a rise if you wait for a while? Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although OSTK stock appears to be an exception to this general observation. It’s pretty powerful to test the trend for yourself for Overstock.com by changing the inputs in the charts above. E-commerce is eating into retail sales, but this might be an investment opportunity. See our theme on E-commerce Stocks for a diverse list of companies that stand to benefit from the big shift.