BBY Short - Gap Fill into EarningsNormally BBY responds well to earnings, but currently stock is testing 10-year resistance around 39. Probability dictates this will fail and IMO there is a vacuum down to the 33-ish level.
BUY trade ideas
Are you buying Bed Bath and Beyond?Technically Speaking
The stock is trading at a level that has proved difficult to sustain. Will it finally break through?
Fundamentals
What do they do? Link below:
www.google.com
Big believer in checklist. Here is mine:
Should I buy?
* Is it trading at an important technical level that is obvious?
* Is the R/R in your favor?
* What is the likelihood this company will either go bankrupt or it's products or services become obsolete?
* How much debt do they have?
* If heavily indebted, how much is coming due in the next 3-5 years? Can they cover their debt payments based on reasonable analysis?
* Will their product or service become obsolete? This really is too hard to say, too many things looked obvious in hindsight, think Blackberry.
Risk
* For individual securities, risk no more than 3% as a starting position. You can always add later.
* Write down a price level that you will consider liquidating all or part of the position.
* What is a reasonable price target?
Execution
* Write down the answers to the questions above and if you can answer yes to all of them, take the trade.
OVER THE LONG TERM, THE WAY TO WIN IS TO HOLD ONTO YOUR WINNERS, AND CUT YOUR LOSERS. IT IS AS SIMPLE AND AS HARD AS THAT.
As always, please leave any comments or questions.
BBY after earning... will it hold up?BBY still has to hit L3 marker for the HVF to complete. So there is a strong probability for a short setup. In contrast, there might be a possible Long 123 setup forming down the road as well. For a long position, entry might be @ prior resistances level round 35.44, otherwise if price action compromises support then further downside is expected. Note that 32 price level could be another entry point for long entry into a 123 for the 2nd wave. The narrative for BBY is bullish especially now since they finally seen an increase in online sales vol. But without any further research proceed with caution for the bullish narrative to change. Lastly technical analysis and outlook is subject to change, as indicators, patterns continue to develop and become more significant. Hence my analysis may be too early.
Is BBY a good deal?Update from my previous post. Looks like BBY is rallying and will continue to possibly around the $36 PT. Expecting this to hit max PT of $37.50. Searching for conformation of rally continuation such as a test of support, probably around the inner declining dotted line or at the previous high resistance of ~$35. So temporary long until otherwise.
BBY BlockBuster Bust?HVF pattern developing. A macro perspective: short BBY long-term simply because of online retail dominance for tech products. I'm skeptical that brick and mortar retail will survive. BBY prior CEO placed a cost focus strategy that the new CEO has agreed and does not plan on changing. Cost focus strategies does not help with growth unless the company was operating inefficiently in the first place. Otherwise a cost cutting play is basically a survival strategy for concerns of a bad financial outlook/guidance. Cost focus helps companies to report better quarterly Income Statement. BBY still faces the same fundamental challenges as ODP, M, WMT, TGT, HGG, SHLD, and other retailers. Drop in BBY competition will not save them from enduring the same fate. Thus lower competition will not drive earnings or market shares of BBY up, or any other retailers for that matter - as some analyst have claimed. New products on the floor will not help either when information regarding the products can be found online, eliminating the need for a salesforce or marketing. However disadvantaged consumers might find BBY brick and mortar stores useful temporary.
Also form a fundamentally aspect, although BBY is not showing Negative Income (not yet), Annual Cash Flow statements are already showing declines in operation. If this trend continues I expect more smart money exiting. The 10 yr weekly chart already indicates a declining trend from BBY all time high, and as the company scrambles to lean itself to changes in market landscape, remedies like capital injections and liquidity will not save BBY. Until I hear a dramatic change in competitive pricing or some kind of operational advantage similar to AMZN, I don't see BBY outlook getting better. BBY might be a BlockBuster Bust.
TRADE IDEA: BBY JUNE 3RD 29.5/35 SHORT STRANGLEBBY announces earnings on 5/24 (Tuesday) before market open, so look to put on a play shortly before Monday's NY close to take advantage of the implied volatility crush that commonly occurs post-earnings announcement. Here's the preliminary setup, since price may move during the NY session, requiring slight adjustment of the strikes:
BBY June 3rd 29.5/35 short strangle
Probability of Profit: 71%
Max Profit: $104/contract
Max Loss/Buying Power Effect: Undefined/~$371/contract
Note: Look to take this off at 50% max profit.
BBY into Black MondaySo this is an Idea Dr. J threw out and said has not lost yet. I figured with the good earnings and the big sell off and considering track record would give a shot. I like the gap up and thus playing the Dec 35 calls into the November shopping run. With market a bit crazy there is risk here and key is to know risk up front at 2.37 per contract that is total risk but would not allow that to expire worthless unless we get huge market event to gap it over the current pricing. I have alarms set and will monitor trade Use longer term options...not volatility is a bit high
BBY Day Trade Retest Gap (Brad Reed May18,2015)If BBY opens below 34.49 consider using the Retest Gap strategy. To get a free and complete stock trading education go to www.RealLifeTrading.com
My BBY Play. Momentum swing.Plotted, are my details of the trade. I like BBY to the downside before their earnings report. I'd like to cover a day before they report with hopefully a nice gain. Immediate price target would be to fill the gap around 36.42. From there, I think it completes wave 5 of eliots wave and hits the 32.88 area.
BBY Bearish gap. Should roll over and continue bearish after some sideways movements. If it doesn't, and closes above 35.75 more bullish than bearish.
BBY Day Trade Perfect Gap N Go (Brad Reed Jan15,2015)BBY Expected to open at 36.27 for a Perfect Gap N Go. To learn this strategy for free, go to www.RealLifeTrading.com
BBY - Iron CondorI am already in a bull put spread on BBY and based on the current options price I am considering Bear call spread 42.5/43.5 - looks like I can get 15%
If stock closes above $40.00 I can buy calls and close the position.
Next leg up seems waiting the bullish gap up get filledLast bullish pattern achieved its measured target price along with a few bullish patterns now it looks price has met a stiff resistance and more of the move was short covering rallying. Buyers need to show up and seems wait and see kind of next few sessions and probably fill the bullish gap up before we see a new serious buyers. If you want to get a real time alerts on this security try us www.2waytrading.com
BBY - Day Trade (Brad Reed Nov20,2014)BBY expected to open at 37.90 clearing a lot of pivot points. Many profitable traders may exit on open so wait 30 minutes or so for stock to bounce off of 10 or 20 ema
