Autodesk, Inc. (NASDAQ:ADSK) shares continued to skyrocket on Tuesday. Some analysts attribute the recent rally to an upgrade by a brokerage firm.

But the rally may soon end. The shares are overbought and close to a possible resistance level. This is why Autodesk is the Stock of the Day.

Back at the end of April, Autodesk bumped into resistance around the $249 level. A reversal followed.

When this happened, many of the investors and traders who purchased shares around $249 decided that their decision to do so was a mistake when the price fell afterward.

Many of these people decided to hold on to their losing position. But they also decided that if they could ever possibly do so, they would sell at the same price they paid for the shares so they could get out at breakeven.

So when the shares returned to around $249 in early May, they placed sell orders. There were so many of these orders that it created resistance at the level again.

A move lower followed this, and the same dynamic occurred. People who regretted buying at the resistance decided to sell at breakeven if they eventually could. When Autodesk rallied back to $249 at the end of May, they placed sell orders.

After another selloff and reversal, the shares hit resistance and sold off again in early July.

As you can see on the chart, Autodesk is getting close to this important level once more. There is a good chance it runs into resistance again.

The stock is also overbought. The red line on the chart is two standard deviations above the 20-day moving average. Statistics and probability theory suggest that 95% of all trading should occur within two standard deviations of the mean.

The fact that the shares have exceeded this threshold means they are overbought. This could draw sellers into the market, and they may push the price lower.

Being overbought while at resistance can be a bearish dynamic. The Autodesk rally may soon end.

ADSK Stock Price Activity: Autodesk shares were up 5.12% at $237.48 on Tuesday, according to Benzinga Pro data.

Photo by The Bold Bureau via Shutterstock