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Bed Bath & Beyond, Inc BBBY was plunging 10% on Tuesday amid sustained selling pressure after a court filing released on Friday showed the company plans to pull out of Canada, filing the equivalent of a chapter 11 bankruptcy to close 54 stores.
The stock has been volatile recently, undergoing two separate short-squeezes this year –the second on Feb. 6, which saw the stock skyrocket 88% in a single day—but ultimately pressured lower due to bankruptcy fears and a proposed $225 million offering of Series A Convertible Preferred Stock and warrants.
Although Bed Bath & Beyond is not near oversold territory on the daily chart, the stock may at least bounce soon because it has printed six red candles in a row and on Tuesday was looking to print an inverted hammer candlestick.
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The Bed Bath & Beyond Chart: An inverted hammer candlestick, when found at the bottom of a trend, can indicate a reversal to the upside may be in the cards. It should be noted, however, that candlesticks are lagging indicators, with Wednesday’s candle needing to verify Tuesday’s.
- Although Bed Bath & Beyond negated its uptrend on Monday by printing a lower low under the Jan. 26 low of $210, a downtrend hasn’t been confirmed. In order for a downtrend to confirm, Bed Bath & Beyond will eventually need to bounce up to print a lower high under $7.03.
- Bed Bath & Beyond’s daily trading volume has been decreasing since Feb. 6 and on Tuesday, the stock was trading on lower-than-average volume. The decreasing volume indicates that the stock may be running out of sellers, which also makes a bounce likely to take place.
- Bed Bath & Beyond has resistance above at $2.38 and $3.43 and support below at $1.27 and at the psychologically important $1 level.
Photo: Mike Mozart on flickr
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Image and article originally from www.benzinga.com. Read the original article here.