Bed Bath & Beyond (BBBY - Get Report) stock was down in midday trading on Thursday, but closed higher by 2.7% at $10.29 in a volatile session after reporting earnings. 

While the decline may seem pedestrian by most investors' standards, red flags are starting to pop up for BBBY stock. The stock is failing to hold the $10 mark and is below a key trend-line from its August lows.

Despite these negative developments, it doesn't mean Bed Bath & Beyond stock is destined to retest its lows. If it were to, though, it would require a decline of more than 25% to sub-$7.20 levels.

With that type of risk on the table, let's take a closer look at the charts.

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Trading Bed Bath & Beyond Stock

Daily chart off Bed Bath & Beyond.
Daily chart off Bed Bath & Beyond.

Bed Bath & Beyond stock is falling on Thursday in reaction to the company's quarterly earnings results. Shares initially ran to as high as $10.67, where it was promptly rejected by the declining 100-day moving average. Similar action took place multiple times this week.

However, each time BBBY stock was rejected, the stock was able to close above the $10 level. That kept Bed Bath & Beyond's uptrend support (purple line) intact, which has been guiding shares higher from the August lows.

By losing the $10 mark, BBBY stock is doing more than falling just a few percentage points on the day. It's losing a key uptrend mark, solidifying resistance at the 100-day moving average and putting shares below the 78.6% retracement.

What does all of this mean?

Short of the stock reclaiming this level before the close on Thursday, it looks likely to break its recent trend. This shifts the technical narrative from a cautiously bullish view to a bearish position.

On the downside, watch the 50-day moving average and $9 level. Below these levels could force longs to cut their losses and give shorts confidence to push BBBY stock lower, possibly to its 2019 lows.

The bottom line: Below $10 and investors need to be careful here. Unfortunately, it's unlikely the charts will look bullish until Bed Bath & Beyond can reclaim the 100-day moving average.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.