Jim Cramer was asked about Bed Bath & Beyond (BBBY) during Monday night's Mad Money Lightning Round. "I'd buy (BBBY)" replied Cramer.
We looked at BBBY back on Oct. 29. We said then that "The shares have traveled a long way from the white-knuckle low of early April. Prices need to regroup and establish a new higher-level base to eventually launch another uptrend. Be patient and wait for a new base to form."
Let's check out the charts again.
In the updated chart of BBBY, below, we can see that the shares declined in late October and made a low in November. Prices bounced into late November and then retested the November low to make a potential double bottom. BBBY is trading below the cresting 50-day moving average line but above the rising 200-day moving average line.
The On-Balance-Volume (OBV) line has been weakening since late October and tells us that sellers of BBBY have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator is now below the zero line in sell territory.
In the weekly bar chart of BBBY, below, we see a stock in transition. Prices have pulled back within an uptrend. Support has appeared around $18. Prices are above the rising 40-week moving average line.
The weekly OBV line has been stalled the past two months or so. The MACD oscillator just crossed to the downside for a take profits sell signal.
In this daily Point and Figure chart of BBBY, below, we can see that prices have held $18.13 twice. An upside target of $22 is indicated.
In this weekly Point and Figure chart of BBBY, below, we can see a potential $31 price target.
Bottom-line strategy: The shares may move sideways a bit longer but as long as the November/December lows hold traders could be buyers of BBBY. Risk a close below $17.90. $31 is our price target.
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