Chart of the Day: Blood Bath and Beyond – $BBBY

by Dan January 9, 2014 3:21 pm • Commentary

Last night, BBBY reported disappointing fiscal Q3 results and offered guidance that was below consensus.  The stock is currently down 12.25% on the news, not a huge surprise given the size of the miss, resulting in the first Q2 to Q3 sequential earnings decline since 2009.

The technical set up following today’s plunge is something worth keeping an eye on as the stock re-traced to almost the exact spot a savvy technician might have predicted on bad news.

The one year chart below shows the stock gap below recent support at $75 (green line) and the stock passing at the prior breakout level from the summer at $70 (red line & circled).  Today’s close will mark the first day that the stock has closed below the 200 day moving average since last March, a sign that momentum has clearly broken.

BBBY 1yr chart from Bloomberg
BBBY 1yr chart from Bloomberg

Whats also worth noting is that the volume today was the largest in a year, so for those looking to play for a bounce on a possible hold of the $70 support level it may make sense to wait a day or so before trying to catch a falling knife.