Bed Bath & Beyond is listed on the NASDAQ with the BBBY ticker. For those who aren’t familiar, the company holds brick and mortar retail stores focused on home products. BBBY operates in North America, with locations in all of the US, Canada, and Mexico.
The BBBY ticker has seen some massive volatility in the past two months thanks to the “meme stock” and WallStreetBets subreddit fiasco featuring gamestop. BBBY has carried a very high amount of short interest as of late. As it was caught up in the short squeeze frenzy, it saw an incredible increase in share price at the end of January 2021, before falling back to a more appropriate level.
The market has been facing quite a bit of pressure as of late, with the NASDAQ trading mostly sideways this week until yesterday’s stocks were hit hard. Luckily, the market fought off some of the early losses from the morning, but still ended the day significantly lower.
NASDAQ Daily Chart
Bed Bath & Beyond’s chart isn’t looking much better lately, but as mentioned earlier, this is mostly due to the hype it was swept up in with the “Gamestonk” fiasco. BBBY is now trading at a more modest short interest of 27.8%. This is down from 65.5% in early January when we saw the spike in share price.
Most of the short interest had covered their shorts between January 15th and January 29th. We saw the BBBY ticker skyrocket from just $17.61 on New Year’s Eve, to a high of $53.90 on January 27th, just 2 days before the short interest report came out.
BBBY – Bed Bath & Beyond Chart
After the peak of $53.90, BBBY fell the next day hard, and continued until February 2nd when it fell further, but met some support at $25.38.
There is not enough evidence yet to claim this is a true support line. The stock seems to be consolidating sideways here, so it is possible it will treat this as support. It is worth noting that historically, Bed Bath & Beyond hasn’t had a very vertical trajectory. Many long periods of time the company has traded sideways, look at November 10th 2020 until January 2021 in the chart above. This may mean that investors are now simply comfortable in the $24-$30 range.
Until there are more developments in the chart, there is no enter strategy setting up currently. I have a long position in BBBY. If the price falls below the 50 day moving average and closes below it, I plan to exit my position and cut losses. Until this happens, I will hold to see if a new pattern develops.
As always, Stock Tavern is not suggesting you buy or sell this stock, and this analysis should not be taken as financial advice. Always do your research and make your own decisions, we all have different risk profiles and therefore no trade is right for everyone.
Disclosure: Stock Tavern is currently long on BBBY