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Today, we’re opening a new bearish trade on Bed Bath & Beyond Inc. (NASDAQ:BBBY).
Earnings will be released after the market closes next Wednesday, Dec. 20. Like everything else in retail, the company is suffering from increased competition from Amazon (NASDAQ:AMZN) and a shift towards online shopping.
Margins have been low and are expected to continue declining despite early signs that Black Friday top-line sales were good across the rest of the sector.
The “pipe top” technical pattern that appeared at long-term resistance on Dec. 4th and 5th should keep the stock below $24, and we expect investors to start selling ahead of earnings next week.
‘Buy to open’ the BBBY January (2018) 22.50 Put (BBBY180119P00022500) for a maximum price of $1.25.
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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade with our $19 for 2 months Holiday Savings Special by clicking here.