Bed Bath & Beyond Surges Higher In This Key Trend: What's Going On?

Bed Bath & Beyond, Inc BBBY was trading over 6% higher when the market opened on Wednesday after rallying 13% During Tuesday’s market session.

The move higher comes in tandem with several other retail favorites surging up over recent trading days and amid the two-year anniversary of GameStop and AMC Entertainment’s historic short squeezes.

During that period, which lasted 11 trading days between Jan. 13, 2021 and Jan. 28 of that same year, GameStop skyrocketed 2,311%. Several other stocks, including Bed Bath & Beyond, also rose to fame.

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Bed Bath & Beyond surged 146% between that time frame to reach a Jan. 27, 2021 high of $53.90, a price at which the stock hadn't traded since December 2015. Since then, Bed Bath & Beyond has seen many subsequent smaller short squeezes, but overall, it has decreased steadily and reached a more than 20-year-low of $3.17 on Jan. 6.

Bed Bath & Beyond’s short interest is high, indicating a short squeeze could be taking place. As of Dec. 30, 38.55 million shares of Bed Bath & Beyond’s 65.6-million-share float were held short, meaning 58.77%, up from 35.36 million in November.

From a technical analysis standpoint, Bed Bath & Beyond looks headed higher over the longer term, having confirmed a new uptrend. The stock could also be settling into a bull flag pattern on the daily chart.

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The Bed Bath & Beyond Chart: Although Bed Bath & Beyond skyrocketed 362% between Jan. 6 and Jan. 12, the stock didn’t confirm a new uptrend until Tuesday, when Bed Bath & Beyond printed a higher low at the $3.35 mark. For the uptrend to remain intact, Bed Bath & Beyond will need to pop over the Jan. 12 high of $5.87 over the coming trading days.

Bed Bath & Beyond may be settling into a bull flag pattern and if the stock breaks up from the pattern, the uptrend is likely to continue. If Bed Bath & Beyond breaks up from the downward sloping flag formation on higher-than-average volume, the measured move indicates the stock could surge up toward $15.

If Bed Bath & Beyond continues to trend lower and closes a trading session under the eight-day exponential moving average, the bull flag will be negated. If that happens over the next few days, Wednesday’s high-of-day could become a lower high, which would also negate the uptrend.

Bed Bath & Beyond has resistance above at $6.36 and $8.29 and support below at $4.26 and $3.43.

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