• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Best Buy Needs a Bullish Spark to Resume Its Rally

Momentum in the stock of the electronics and appliance retailer has been weakening of late.
By BRUCE KAMICH
Nov 23, 2020 | 08:32 AM EST
Stocks quotes in this article: BBY, AEO, GPS

During last Friday's "Mad Money" program Jim Cramer laid out his game plan for this week. Tuesday is a huge earnings day, he told viewers. We'll hear from Best Buy (BBY) , American Eagle Outfitters (AEO) and The Gap Inc. (GPS) , all Cramer faves. 

Let's check out the charts of BBY ahead of its third-quarter numbers.  

In this daily bar chart of BBY, below, we can see the price action of the past tumultuous 12 months. Prices declined with the broad market to a March low and then we saw a quick and successful retest of the low in early April. BBY rallied smartly to late August. From the latter part of August the price action shifted to a rally and pullback phase that is ongoing. BBY made a new high earlier this month but the indicators are wobbly. The trading volume is relatively stable from August instead of rising.
 
The On-Balance-Volume (OBV) line has made a new high for the move up but it has lagged the price action. The 12-day price momentum study in the lower panel shows a bearish divergence as momentum has been weakening since August even though prices have been making higher highs. This pattern tells us that the rate of acceleration in prices has been slowing, which can foreshadow a price peak.  
 
 
 
In this weekly bar chart of BBY, below, we can see a mixed picture. Prices are still in an uptrend and trading above the rising 40-week moving average line. The weekly OBV line shows a rise from March but the line is also flat in October and November so far. The 12-week momentum study shows that momentum has been weakening since August. 
 
 
In this weekly Japanese candlestick chart of BBY, below, we can see upper shadows above $120, telling us that traders are rejecting the highs above that level. 
 
 
In this daily Point and Figure chart of BBY, below, we can see the uptrend in price as we filter out smaller jiggles. Prices have overrun a target of $84. A trade at $110 or $108 may start to weaken the picture. 
 
 
 
Bottom line strategy: I have no special knowledge of what the numbers for third quarter look like for BBY, but I can say the technical picture has been weakening ahead of the figures. A sideways to lower trading range may be what we encounter in the weeks ahead. 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Consumer | Retail | E-Commerce | Mad Money | Real Money | Consumer Discretionary | Earnings Preview

More from Stocks

Alibaba Shares Spurt Higher, but Drags on the Online Giant Lurk

Alex Frew McMillan
May 27, 2022 9:14 AM EDT

China's ongoing fight against COVID threatens to make the going tough for companies that do business there.

Thursday's Action Was Promising For Those Awaiting a Bear Market Bounce

Bob Byrne
May 27, 2022 8:30 AM EDT

The post-earnings rebounds of Snowflake and Nvidia plus the rally in the major indexes gave traders reasons for hope, at least in the near term.

Holding Up a Mirror to Ulta Beauty and Seeing a Tricky Technical Position

Bruce Kamich
May 27, 2022 8:01 AM EDT

Solid first-quarter results are sending shares of the beauty products retailer higher, but the question is whether that strong move will hold.

Don't Change the Channel on Roku

Bruce Kamich
May 27, 2022 7:37 AM EDT

Here's why the shares could stage a recovery.

Be Adaptable, Trade Tactically, Pretty Sweet Earnings, Death of Crypto?

Stephen Guilfoyle
May 27, 2022 7:36 AM EDT

Plus, to survive in this market you must be a jack of all trades and understand both the fundamental and technical sides of the investing coin.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:46 PM EDT STEPHEN GUILFOYLE

    We're Shedding Some of This Holding on Strength

    Check out the Stocks Under $10 portfolio here!
  • 11:33 AM EDT PETER TCHIR

    Thoughts Ahead of the Fed Minutes

    Recent economic and earnings issues are convincing...
  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login