Hi and welcome to J.A. I will try and answer your question the best I can..

This is surely a mechanical issue since the flashing od light would indicate an electrically detectable issue in it.

There are a couple of things that can produce these symptoms, the first is wrong fluid level in the transmission. Check for correct fluid level after transmission is hot. This should be after at least aXXXXX and the stick should read at the top of the marked area in the dip stick. Secondly the transmission filter could be clogged and sometimes will cause this effect. There are also parts called accumulators that could have a broken spring inside. But I would go basically with fluid level and filter condition. P.S. when you check for fluid level also note transmission fluid color, it should be ruby red and have no burnt like smell, if it is too brownish or smells kind of burnt then you have to know that when you replace this fluid the vehicle might not even shift at all since new fluid magnifies any issues in the transmission and its a known fact that it could just slip totally and you would have to overhaul or replace it...