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Trading Bed Bath & Beyond: Up 20% on the Day, Down 22% From Session High

Bed Bath & Beyond stock is in focus on Wednesday, with shares up more than 50% at one point in the session. Here's how to trade it now.

While shares of  (BBBY) - Get Bed Bath & Beyond Inc. Report are up “just” 20% on the day — bulls were hoping to lock in some bigger gains — it is still one of the market’s top gainers on the day, joining CVS Health  (CVS) - Get CVS Health Corporation Report and Uber  (UBER) - Get Uber Technologies, Inc. Report.

The move is enough to stir up the short squeeze conversation, as shares were up more than 50% at today’s high. In after-hours trading the stock was up even more dramatically, clearing the $30 level.

The company has not been shy about its share buybacks, as CEO Mark Tritton looks to improve the retailer’s financial footing and its operations. 

So far he's been successful at steadying the operation, although it has been a bit of a bumpy ride.

Most recently, the company announced an accelerated share-buyback plan to go along with a marketing deal with Kroger  (KR) - Get Kroger Co. (KR) Report.

Will that be enough to continue driving the stock higher?

Trading Bed Bath & Beyond Stock

Daily chart of Bed Bath & Beyond stock.

Daily chart of Bed Bath & Beyond stock.

If a short squeeze is still in play with Bed Bath & Beyond stock, we could be looking at some serious gains around the corner.

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Aiding that squeeze could be the company’s very own buyback plans, particularly with about 27.5% of its shares currently sold short.

For now, the stock has suffered from a major fade off Wednesday’s high, even though Bed Bath & Beyond is still sporting massive one-day gains, but has pared down more than 20% off today's high. 

Shares opened near the 50-week moving average around $25 and faded back toward $20 and the 50-day moving average. 

From here, we need to see if the stock can regain any upside momentum and challenge this week’s high. Otherwise, a deeper fade could be on deck.

If it’s the latter, look for a potential gap-fill back down toward $16.80. That would also put the 200-week moving average in play.

On the upside, I want to see if the stock can reclaim $22.14. If it can, it could put the 50-week and 200-day moving averages in play, along with this week’s high.

Above that opens the door to the weekly VWAP measures near $28.50, then the $30 resistance mark.

Is the setup easy after such a massive move? Of course not. However, we have our levels to watch on the upside and on the downside.

For now, keep an eye on today’s low at $19.42. On the upside, watch $22.14.