In his first Executive Decision segment of Thursday's "Mad Money" program, host Jim Cramer sat down with Cory Barry, CEO of Best Buy (BBY) , the electronics and appliance retailer.
Barry said Best Buy's purpose is to enrich the lives of its customers through technology. That's not just a tagline, she added. Every Best Buy associate wants to help customers accomplish things using technology.
Best Buy has low employee turnover, which Barry credited to competitive pay, comprehensive benefits and career paths for every associate.
When asked about continued growth, Barry said the pandemic has created some permanent consumer behaviors. People are spending more time at home. They're streaming more content, playing more games and cooking a lot more at home. They're also working more at home, which means customers need to keep up with new technology as it arrives.
Let's check out the charts of BBY. In our Oct. 27 review of BBY we wrote "the charts and indicators for BBY are in good shape but the stock has a history of refusing to breakout above $125. BBY needs to prove itself so buyers should wait for a trade at $127.44 or higher before going long. Risk to $115 and look for $162 on the upside."
BBY broke out on the upside and briefly rallied above $140 before gapping to the downside and quickly stopping us out.
In this updated daily bar chart of BBY, below, we can see that besides a rally in October and November, BBY has been in a downtrend the past 12 months. A low in late February looks like it can soon be retested. I have no confidence that the February low will hold for long and new lows are likely. Prices trade below the declining 50-day moving average line and below the declining but slower-to-react 200-day line. The On-Balance-Volume (OBV) line has moved up and down with the price action since October and shows a bullish divergence in late February when price made a new low but the indicator did not. The Moving Average Convergence Divergence (MACD) oscillator did not make a new low when prices declined in February but it is still below the zero line.
In this weekly Japanese candlestick chart of BBY, below, we find ourselves looking at a large topping pattern from the middle of 2020. A rough neckline across $100 defines the pattern. Trading volume has increased since the downside breakdown from the pattern. Prices trade below the declining 40-week moving average line. The weekly OBV line and the MACD oscillator are bearish.
In this daily Point and Figure chart of BBY, below, we can see a price target of $77.
In this weekly Point and Figure chart of BBY, a price target of $75 is shown.
Bottom line strategy: The fundamental story of BBY may seem attractive but traders and investors in BBY do not seem to be buying it. I like it when the story and the charts are in agreement. I am content to wait until that happens.
