by Serge Berger | April 8, 2013 1:01 am
Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter here.
Best Buy (NYSE:BBY) — The electronics retailing giant fell from the upper $40s in 2010 to the low teens by the end of 2012, as investors’ emotions ran high thanks to news and rumors about the company’s ownership and business prospects.
Since then, the shares have more than doubled in price with news surrounding the stock improving. In mid-March, BBY staged a key breakout past a downtrend line (blue line) that dates back to January 2011. After a textbook retest of the breakout point, the stock powered higher again.
While BBY is likely somewhat overbought in the immediate term, it appears to have enough solid footing to move higher into its next big resistance area near $28. This area acted as resistance in late 2011, and again in the first quarter of 2012, but now has a good chance to act as a magnet of sorts for the stock.
Broader market pressure will likely keep the upside somewhat capped, but given the momentum and the improving single-stock story here, BBY stands a good chance of rising to the $28 area, a 10% move higher from current prices.
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