As we near the holidays, Best Buy (BBY) - Get Report will be on investors’ radar. But even before then, the Richfield, Minn., electronics retailer will be in focus since it's scheduled to release its third-quarter report ahead of the open on Tuesday.
Obviously, earnings will drive the narrative in the short term and in this holiday-shortened trading week. But as we as enter the last weeks of 2020, investors will want to know one main thing: Will sales growth remain strong?
They’ll want to know whether the pandemic is driving strong revenue, as students and work-from-home employees stock up on office equipment. They’ll also want to hear positive commentary surrounding guidance and holiday sales.
The bulls will want some confidence that Best Buy is going to be a part of that conversation as well.
Trading Best Buy Stock
At a glance, the charts are relatively straightforward with Best Buy stock.
The shares are trending from the lower left to the upper right. The 50-day moving average has been support since mid-June and resistance has become stout near $123.
In a world where earnings weren’t just around the corner, the bulls would likely be playing this name for an upside breakout ahead of Black Friday.
Of course, a breakout is still a possible reaction, but so, too, is a decline. Many traders will wait until after the report is out to take a position in Best Buy.
Should the shares break out and clear $125, let’s see whether Best Buy can clear the two-times range extension and channel resistance near $133.
Above that could open the door to a possible run to $150 and, eventually, a longer term price target using the 261.8% extension near $160.
On the downside, a correction can be bought so long as support holds strong. In this case, that’s the $114.50 to $116.50 area.
In that zone, Best Buy stock finds the 161.8% extension — which was resistance when Best Buy last reported earnings — as well as the 20-day and 50-day moving averages.
Below opens the door to a test of the October and November lows near $110 and the 100-day moving average.