When you think about stocks you want to own, it's not likely that electronics retailer Best Buy (BBY) ranks very highly on that list. In the last 12 months alone, this $5.4 billion stock has lost close to 40% of its market value as consumers kicked tires in its retail stores and then bought their gear at cheaper online competitors (or eroded margins by forcing BBY to price match more aggressive brick and mortar stores).
I'll be the first to say that I wouldn't buy Best Buy. But with this stock coming back from oversold territory, I'd sure trade it.
Best Buy's first signs of life came when the stock broke out above resistance at $13, a place below which shares had been consolidating sideways. Since then, BBY has been moving higher, coming up to breakout through former trendline resistance last week. That more recent push through resistance is the signal that buyers are still in control of this stock at higher levels.Shares are pulling back a bit today, matching the broad market's correction this morning. That gives traders a chance to jump into Best Buy on a throwback to newfound support at that dashed red line. As long as BBY doesn't fall back through that level, shares look buyable right here.
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