NEW YORK (TheStreet) -- If you are a recent investor in Bed, Bath & Beyond (BBBY) book your profits before the closing bell today. If you are a long-term investor looking to buy the stock, wait until Wednesday.
Professional traders have a short interest in shares of Bed, Bath & Beyond at approximately 12% of the shares available for trading. The home furnishing retailer reports quarterly earnings after the closing bell today and a better-than-expected report could create such demand that there could be a major short-squeeze rally.
Must Read: Warren Buffett's Top 10 Dividend Stocks
However, the company has also missed quarterly results in two of the last three quarters and matched estimates once. As a result, the stock price plunged significantly each time.
Odds favor Bed, Bath & Beyond will miss earnings again. Here's why.
A recent report by the U.S. Census Bureau shows household incomes declined slightly in 2013. On Monday, the report on existing home sales was weaker than expected for August with a year-over-year decline of 5.3%. In this environment consumers are likely reducing their purchases of home furnishing products, which should be reflected in the earnings report from Bed, Bath & Beyond.
Let's take a look at the daily chart for Bed, Bath & Beyond.
Courtesy of MetaStock Xenith
The daily chart for Bed, Bath & Beyond ($63.23) shows the extreme volatility following the last three earnings reports. Here are the three stock plunges from left to right.