This Retail Stock Could Get Hammered On A Fake Out

WEEKLY MARKET ANALYSIS

Stocks opened modestly lower but the decline reversed and accelerated during the day into the close. The Dow Jones Industrial Average ETF DIA was down 1 points on the day and closed at 256. For the S&P 500, there is support near 2790 and 2764. Resistance levels are currently at 2842 and 2868. The wide divergence by vol in oil is concern for watch.

GLOBAL ASSETS UPDATE

TWELVE SECTOR ANALYSIS

VOLATILITY UPDATE

On Wall Street, 7 of the 12 major market sectors are seeing red today. The biggest losers are Industrial (XLI), Technology (XLK), and Consumer Discretionary (XLY). The strongest sector today has been Transportation (XTN) which has gone up 1.3%.

The CBOE Volatility Index (VIX) is down $-1.54 going from $16.22 to $14.68 today. Both Call and Put volumes are below average today. The ratio of puts to calls for the current at-the-money strike of $15 is below average which means that traders are favoring Calls over Puts currently.

MARKET HEAT

A NASDAQ stock with unusually high volume today is Bed Bath & Beyond Inc. (BBBY). On the AMEX McClatchy Co (MNI) has had significant interest, and on the NYSE Carnival Corp (CCL) has had unusual volume.

The biggest mover out of other high-volume stocks is Bed Bath & Beyond Inc. (BBBY) which has moved up over 22% recently on volume of over 56 million shares. The chart below shows the performance of BBBY over the last year. Bed Bath & Beyond Inc. is a retailer, which operates under the names Bed Bath & Beyond (BBB), Christmas Tree Shops, Christmas Tree Shops andThat! or andThat! (collectively, CTS), Harmon or Harmon Face Values (collectively, Harmon), buybuy BABY (Baby) and World Market, Cost Plus World Market or Cost Plus (collectively, Cost Plus World Market).

DARWIN BED BATH & BEYOND INC. FORECAST

The performance of Bed Bath & Beyond Inc. (BBBY) will be worth watching in the near term for a number of reasons. The forecast for the coming week on BBBY is for the price to go down. The correlation of BBBY to the S&P 500 recently has been -0.3 which is a weak negative correlation. The key level to watch for BBBY is downside support at the $15 price point.

Trade smart,

Paul "Bulldog" Hudson, Chief Investment Officer
Darwin Investing Network