I’m no expert, so all I can really tell you is what applied to me. While you may feel pain at the knee, the problem is likely at your hips. The IT band connects to your hip at two points; the gluteus maximus (GM) and the tensor fascia latae (TFL). See image below. Focus on stretching the GM and the TFL. I would tell you not to waste your time trying to stretch or foam roll the IT band - it can’t be stretched. The knee pain you feel on the outside of your knee is nothing more than a symptom for which a TENS unit works wonders! Target/CVS/Walgreens sell one (made by Omron) for about $40 - go get it!
Two stretches for you to try. Hold the stretch for at least 60 seconds. The more often you do these, the better - but at least twice a day. You should be able to figure out if these stretches are the solution within a single workout session by riding on an indoor trainer (assuming you have the inflammation at your knee somewhat under control with a TENS unit). Do the stretches and then get on the trainer. As soon as the pain begins to flare up, get off the trainer and do the stretches again. Get back on the trainer. You should notice some improvement. Over a period of a week or two, you should be able to ride the trainer longer and longer without stopping to stretch. I found I no longer needed to do the stretches after about two weeks. If the stretches show absolutely no sign of improvement during that first workout, you’re still at square one and you didn’t waste a week of your life doing pointless stretches. Kind of a lose win in that case…
Stretch the TFL:
https://www.youtube.com/watch?v=FVdq9_T5qcI or google “half-kneeling hip flexor stretch”
Stretch the GM:
http://youtu.be/mlYM3KWwrGY