BEST BUY (BBY)
There is a most entertaining and interesting shorting opportunity showing itself in the stock of BBY (Best Buy).
With the GameStop craziness a few weeks back came a short squeeze attempt with loads of hype and publicity in the stock of Bed, Bath and Beyond.
That stock’s symbol is BBBY, and as is often the case, there are plenty of foolish, impulsive and uninformed gamblers who typo-ed their orders and bought BBY (with only 2 B’s!) by mistake!
That buying surge came out of nowhere and caused a “splash” of liquidity in BBY. This stock had already experienced an “end of trend” process and was turning over into correction, so this sudden bullish surge likely caused a small short squeeze in the stock.
Soon, the fumble-fingers will have figured out they made a mistake and start to panic. They will need to dump their erroneously accumulated shares into a supply/demand environment that is strongly bearish.
This should deliver a quick ping-pong back to the lows, at which point we can measure with more precision what the odds are for more bearish follow-through.
So, my trade plan in this stock would be…
Take short exposure anywhere within the red zone, and take a loss if the high side of that zone is violated.
I would definitely take ½ profits when the green zone is tested and at that point will make a data-determined decision about whether or not to hold on and trail stops based on my forecasting tools measurements.