The share price of Bed Bath & Beyond ( BBBY) has rebounded sharply in recent sessions despite that the domestic merchandise retailer has filed with the Securities and Exchange Commission (SEC) that it was considering filing for bankruptcy.
Is there something wrong with this picture?
Let’s check the charts and indicators.
In this daily bar chart of BBBY, below, I see a clear downtrend from $30 to below $2 the other day. Let me say that again — a clear downtrend. Prices made a sharp, but unsustainable rally in August. Note that I bolded the word “unsustainable”. This truly terrible price action tells you that this company has serious problems. Prices jumped back above the declining 50-day moving average line with no basing action and no prior accumulation or a period of time with the On-Balance-Volume (OBV) line going up.
In this weekly Japanese candlestick chart of BBBY, below, I can see a two-year downward trend in prices. Prices trade below the declining 40-week moving average line. The weekly OBV line is bearish and so is the Moving Average Convergence Divergence (MACD) oscillator.
In this daily Point and Figure chart of BBBY, below, the chart suggests a price target in the $9.75 area.
In this weekly Point and Figure chart of BBBY, below, I see the same $9.75 price target as the daily chart above.
Bottom line strategy: I have no idea what traders are looking at on various message boards or elsewhere about BBBY, but the charts and indicators are not bullish.
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