Buy Alert: Best Buy (BBY)

By Jim Pearce • January 5, 2017

TRADE INSTRUCTIONS
Date: January 5, 2017
Name: Best Buy
Symbol: BBY
Type: Open
Limit: Buy below $43

TRADE TARGETS
Holding Period: 3 months
Target Return: 13.9%
Annualized Return: 55.6%
Target Price: $49
Stop Loss Level: $38

COMPANY DESCRIPTION
Best Buy Co., Inc. is a retailer offering a wide array of technology products, services and solutions. The Company offers products and services to the customers visiting its stores, engaging with Geek Squad agents or using its Websites or mobile applications. Link to company website.

TRADE RATIONALE
Best Buy has been a trader’s dream for the past year, jumping up in value after each unexpectedly strong quarterly earnings report and then drifting down until the next quarterly report once again surprises the market. So when it ran up to $48 last month I wondered how long it would take until it dropped back down into my “buy zone”, which it did this week.

As of this morning, BBY is the only stock in the entire S&P 500 that earns a perfect score of 10 from my IDEAL Stock Rating System. Trading at 12.6 times trailing earnings and 12.1 times forward earnings, there is very little recognition of its ability to grow profits built into its share price despite its proven ability to do so over the past several quarters.

From a technical perspective, last week BBY dropped below its 50DMA and has bounced off its lower Bollinger Band a couple times. The last time this pattern occurred in mid-November (including the weeks before and after the presidential election), its share price exploded to the upside after the release of its previous quarterly report. It is trading down 4% this morning, so I am putting a tight buy limit price on it so we can grab it while it’s down.

What may cause BBY to once again jump up the charts prior to its next quarterly report due the third week of February? Final holiday sales figures will soon be released, which may affirm the mounting belief that Best Buy is successfully fending off Amazon for online sales. If not, even a technical bounce might net a 5 – 10% gain over the next ninety days so this play may work particularly well with call options. If both those fail, its year-end report in six weeks should do the trick.

NOTE: BBY is optionable

Stock Talk

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Comments Guidelines

Larry Johnson

01/05/17 ‐ 12:51pm ET January 5, 2017 at 12:51pm ET

Got orders in for stock and options at below current market….waiting for a little more drop.

Jimmy Cook

01/05/17 ‐ 1:54pm ET January 5, 2017 at 1:54pm ET

If you don’t mind my asking, what price will you buy at ? I am new here and not sure what to do.

Larry Johnson

01/05/17 ‐ 1:59pm ET January 5, 2017 at 1:59pm ET

Hi Jimmy.
I just purchased 100 shares at $42.45.
I was hoping it would drop back down below $42 but it doesn’t look like it.
It’s been having around $42.50 for a while.

Jimmy Cook

01/05/17 ‐ 2:04pm ET January 5, 2017 at 2:04pm ET

OK. Thank you.

Larry Johnson

01/05/17 ‐ 2:07pm ET January 5, 2017 at 2:07pm ET

Also, just bought one March 2017 Call Option (strike price of $43) for $2.81.
IF you’re new to all of this, I’d recommend just sticking with the stocks themselves for now until you get comfortable with how options work….they’re a totally different cat.

Rick

01/05/17 ‐ 12:53pm ET January 5, 2017 at 12:53pm ET

Bought BBY at $42.485 at 12:50 on Fidelity.

Maria R

01/05/17 ‐ 2:00pm ET January 5, 2017 at 2:00pm ET

Bought BBY @ $42.44 2 Schwab. Thanks

Alpha_Dog_510

01/05/17 ‐ 2:06pm ET January 5, 2017 at 2:06pm ET

Waiting for a Trump Tweet before I buy. Lol

Happy New Year everyone.

Larry Johnson

01/05/17 ‐ 2:23pm ET January 5, 2017 at 2:23pm ET

Happy New Year to ya, Alpha.
A Trump tweet? On BBY???….LOL….Good luck.

Rick W.

01/05/17 ‐ 2:08pm ET January 5, 2017 at 2:08pm ET

Hi Jim,
Do you need price and brokerage confirmation from us?

Jim Pearce

01/05/17 ‐ 2:53pm ET January 5, 2017 at 2:53pm ET

No, but some members like to share that info to help each other out, but of course you don’t have to participate.

Rick W.

01/05/17 ‐ 3:24pm ET January 5, 2017 at 3:24pm ET

I’m certainly will to help…bought BBY on TOS at $42.44. Thank you Jim.

black arrow

01/07/17 ‐ 8:49am ET January 7, 2017 at 8:49am ET

Hi Rick I was using TOS too, like Larry you beat me.. Thats fine with me I am Zen about it.
I hope you exceed with your trading.

Rick W.

01/07/17 ‐ 8:59am ET January 7, 2017 at 8:59am ET

Thanks black arrow. I hope we all do well with this!

black arrow

01/05/17 ‐ 2:54pm ET January 5, 2017 at 2:54pm ET

Hi Folks I am in just bt BBY it feels like they should give me a discount with all the emails they sent me.
Used TD Ameritrade/TOS bt stock via TOS @ 42.49. A score of 10 sounds Super. Here is a link to its chart: http://schrts.co/oybxBs
What I like best on chart is todays candle is a hammer [they can change as day finishes but I think it will stay a hammer. This can also be called a piercing [no pun here Jim ] pattern. Usually next day will be higher. I like the upper bollinger Band being in the area where Jims sell rec is.
Larry you always beat me thats OK :^)
Best Wishes for a good traDE

black arrow

01/05/17 ‐ 3:44pm ET January 5, 2017 at 3:44pm ET

update on the Morphing chart. It now looks as though it is becoming Dragon fly Doji – this is good for us.
Looks like a Capital “T” long lower shadow and no upper shadow. BBY has been in a long downtrend, and the lower shadow gives evidence of buying pressure. This can signal a Bullish Reversal of price, or bottom. Confirmation next day is required.

Jeff

01/06/17 ‐ 8:29am ET January 6, 2017 at 8:29am ET

New to this service I’ve been following the other Jim for years with OFI and VT. Went with the following bullish call spread from the BBY alert yesterday (expires a bit earlier then alert recommendation)

BTO BBY Feb 17 41 Call
STO BBY Feb 17 44 Call
Filled for a net debit 1.58

Benyeh

01/06/17 ‐ 8:53am ET January 6, 2017 at 8:53am ET

Hi Jeff,
Can you explain what is BTO and STO?

Jim Pearce

01/06/17 ‐ 9:31am ET January 6, 2017 at 9:31am ET

“Buy to open” and “Sell to open”, which means Jeff is long a call with a strike price of $41 and short a call with a strike price of $44, both of which expire on the same day next month (2/17/2017).

Benyeh

01/06/17 ‐ 9:54am ET January 6, 2017 at 9:54am ET

Hi Jim,

Thanks for instructions.

Rick W.

01/08/17 ‐ 9:11am ET January 8, 2017 at 9:11am ET

Hi Jim,
I have a question based on simple curiosity and don’t know if you are willing to share information but here goes. In relatively general terms, what resources do you use to influence your investment decisions and how much do you spend each year on these resources? I’m guessing the resources you utilize are not available (high cost) to the individual investor. Thanks.
Rick

Jim Pearce

01/09/17 ‐ 9:50am ET January 9, 2017 at 9:50am ET

In terms of external resources that we pay for (hard costs), there are two that I primarily use to populate the Rapid Profits Matrix used by Systematic Wealth. One costs about $30,000 per year and provides us with the data points used by my IDEAL Stock Rating System. The other has a variable cost that I estimate will cost us around $40,000 this year, and uses algorithms to convert those same data points into buy and sell alerts. Since we use both of those resources on a large scale we probably pay more than an individual investor would, so my guess is you could probably get both for closer to $50,000 per year if you wanted to.

Rick W.

01/09/17 ‐ 4:03pm ET January 9, 2017 at 4:03pm ET

Thanks for your candid response. It makes me feel like I am getting a bargain!

black arrow

01/10/17 ‐ 4:43am ET January 10, 2017 at 4:43am ET

You are getting a bargain Rick. Here is another one; look up Barron’s.com, it’s a more focused part of WSJ. I think it can get your head focused in a specific area thinking about investing and trading. This has a very affordable cost for the individual.

I think the systems Jim Pearce utilizes may be deceiving to our comprehension because a TON of work is done for members. This is so out of the ordinary, it can be hard for us to fathom. We also need to be patient, which can be difficult in the modern world. I hope your understanding will increase. What about books? William O’Neil has an amazing number of easy to understand books- get one and say read it ” on the subway”.
Best Wishes

Rick W.

01/10/17 ‐ 5:17pm ET January 10, 2017 at 5:17pm ET

Thanks for the ideas BA. I’m pretty familiar with the resources you mentioned as well as a number of others. I have found it can be harmful to follow too many theories, philosophies and opinions so what works best for me is to narrow it down to just three individuals that I am predominantly willing to follow. I’m new with Jim but am favorably impressed so far. I hope to be with him for a long time.

black arrow

01/11/17 ‐ 8:31am ET January 11, 2017 at 8:31am ET

Rick, Sounds like you are on a good path to me. I know exactly what you mean. Cant listen to everyone. I recall once a person at Briefing.com told me to check out John Murphy, thats why I joined stock charts.com and yesterday I was taking in a webinar from Art Hill. I enjoy Arts work, because he puts in time developing systems we can use. Like making scans that deliver us Charts from the scan, or using PPO to time entry, They are both great for different reasons iMOP. You sound like you are putting a lot of thought and effort into this; and like yourself I am happy with Jim Pearces service.

black arrow

01/17/17 ‐ 1:27pm ET January 17, 2017 at 1:27pm ET

Hi Rick,on returning from Shopping I had a 900+ profit on BBY, true its not at target, but IO went for it wait for a pullback and play it again Rick. Also found DLPH had gotten above resistance with a bullish breakout so bt another 100 shares. IO bt the breakout and plan to hang in there til it hits april high about 6.6% above the breakout. I am taking in a webinar by Art Hill Its good as usual he is good. Does this mean I may be ADD?

Maria R

01/17/17 ‐ 3:02pm ET January 17, 2017 at 3:02pm ET

Hi Black arrow. ADD? did you mean Attention Deficit disorder? Seems to me you are pretty organized and I think you for your posts.

black arrow

01/17/17 ‐ 3:36pm ET January 17, 2017 at 3:36pm ET

Hi Maria,
And glad my posts help you. Yes I meant attention Deficit Disorder, partly making a joke on all the things kids are labelled that no one knew about when I was a kid. Sometimes I think if they had known about it then maybe I would have been labelled. Here is one thing that helped me out years ago, when I was an apprentice at General Dynamics shipbuilding they were very strict and suggested very strongly we would go to night school. Thats literally a 7 year long story for me, but I enjoyed my education. Instead of just watching the webinar I was looking at charts and trading too. I did some of the GWPH pot stock, sounds like it has more potential than APPL. BBY definitely pulled back in price after I sold so glad I did. I notice someone just bt 388 shares, but I will wait a while longer. I DO think it will be a good one for us, but when 900+ is staring me in the face I’m taking it off the table.

Hope you arte doing well with the stocks and Puts
Cheers

Maria R

01/17/17 ‐ 4:01pm ET January 17, 2017 at 4:01pm ET

from one ADD to another 🙂 I am a bonafide ADHD, diagnosed after my daughter was diagnosed as an adult. But we have learned to deal with it. We joke that my daughter is a high school dropout and if she enlists in the military they will make her take a GED, even though she has a MS, CPA.
ADHD is prone to car crashes though. You do not want me behind your car. 🙂

black arrow

01/17/17 ‐ 4:31pm ET January 17, 2017 at 4:31pm ET

well I have learned to eventually ALWAYS put my keys in the same place. I wind up doing most of the cooking just finished making pizza dough. I do tend to interrupt but have tried to back off on that. My wife is usually late haha.
Hey a CPA could be great for you.
sorry didn’t mean to interrupt haha.
Cheers

black arrow

01/10/17 ‐ 10:13am ET January 10, 2017 at 10:13am ET

The significant 50 day Moving Average. Why is it significant – historically traders always have thought it is – therefore it is. Here is the good part for ustodays candle has punched up through the 50 MA prior to today it has had resistance below the 50 MA. Now that it has gotten above assuming it stays there resistance becomes support. The Fibonacci numbers are areas where it can reach in an uptrend, i.e.: 38%, 50 % etc. Now watch for RSI – relative strength Index to get above 50 the threshold of an uptrend, watch for MACD histogram to flip positive above 0.0. I observed the PPO price percent oscillator blue histogram its most sensitive reading on the pros I have has flipped positive this one measures the per cent increase or decrease. The candle was just pushed back but barely above 50 day MA. If Larry buys more shares it could help.

Larry Johnson

01/10/17 ‐ 1:52pm ET January 10, 2017 at 1:52pm ET

Good afternoon, Black Arrow.
‘…If Larry buys more shares it could help…’
LOL…Well, I’m pretty much set on BBY for now as I have a ton of other non-SW stuff I’m trying to manage. I’ve got my hands full. Although it appears we’re having a pretty good day with it today though. A little more increase and I’ll probably toss a trailing stop on both the options and the stock itself.

black arrow

01/10/17 ‐ 2:04pm ET January 10, 2017 at 2:04pm ET

Yes, can all newer members chant BBY to their computers please. While chaNTING WATCH FOR THE MACD to flip positive its a buy signal for anyone who does not have a position.
Hey my reversion to mean is showing some upside on BKE. Only BKE experiment I will be looking for RSI 70 – or upper Bollinger Band whichever is first.

Just ended a members only webinar by Art Hill at stock charts he is great on technical analysis and keeps to basics as well. Hids main thing is price action.

black arrow

01/25/17 ‐ 7:26am ET January 25, 2017 at 7:26am ET

Hi Folks, I am reentering BBY this AM fer sur already have my order in. I am mentioning this for a cuppa reasons. I like its chart with the last candle straddling the 50 day EMA! I like the upward sloping positive RSI. I like the whole pick from James Pearces system. I only sold for an interim profit, and have faith in this selection.
http://schrts.co/ttNyM6
Cheers everyone time to put on my Chauffeur cap – after scraping ice

black arrow

01/25/17 ‐ 10:37am ET January 25, 2017 at 10:37am ET

Back into BBY at 44.70 ahh its going up .Lets Get it On BBY!

black arrow

02/01/17 ‐ 9:03am ET February 1, 2017 at 9:03am ET

More detail of what is going on with BBY chart notice the ominous Hanging man candle at about 12/9.
To me the chart looks positive with an ascending trianglethe black horizontal line is meant to be top of triangle but also looks like a resistance area. Note the dashed line representing the 50 day exponential moving avg yesterdays candle got above it this is goo! Macd flipped to positive – good. Relative strength Index is rising. Note how in first week of Jan there was a hammer [the black candle] then prices rose see dashed vertical black line. Note just before the hanging man the early december candle – now look down to how high RSI was the looks like 90 area. We want to look for RSI in that same area as we approach our profit target. http://schrts.co/45NA23

Derek: Las Vegas, NV

02/01/17 ‐ 3:23pm ET February 1, 2017 at 3:23pm ET

Good analysis and chart. Thanks!

Derek

black arrow

02/02/17 ‐ 9:52am ET February 2, 2017 at 9:52am ET

Hi Derek, JNUG in yesterday out today with a 6.94% profit celebrating Perkins birthday
He is konked on his cushion
cheers

black arrow

02/06/17 ‐ 8:14am ET February 6, 2017 at 8:14am ET

Derek,
DEREK, just apprising you of unusual call purchase from Benziger
Charter CHTR MAR 385 calls 1243 ask 0.80 but the mid price is lower.
I am in. earnings 2/16

Jim Pearce

03/29/17 ‐ 11:13am ET March 29, 2017 at 11:13am ET

Looks like our friends at Zacks are helping us out with our Best Buy position: http://finance.yahoo.com/news/bull-day-best-buy-bby-090509430.html. Thanks!

black arrow

03/29/17 ‐ 3:06pm ET March 29, 2017 at 3:06pm ET

You are correct Jim, BBY took a rest, but clearly not down for the count!
Here is a link for visual members http://schrts.co/ZDfbth

black arrow

03/30/17 ‐ 1:52pm ET March 30, 2017 at 1:52pm ET

Not only have you been correct all along on BBY Jim [take a BOW], but I can see an error I made. I got out early got back in still early and made a profit twice. My failure was not going over the chart of this holding routinely. I learned years back in a course if the 50 day MA is moving through a candle then it should go up afterwards. I see many opportunities I had, but did not take. Why? Simply in my mind I had moved on. I am trying to work on having an outlook of prfoits more than once I could have taken profit number 1 kept some and taken number 2.

To be clear I was satisfied with the profit I made, no complaints there good one Jim and still is! I should have continued looking at a chart for each holding I buy. But I did not, my profit #2 could have been about 8%. I am just mentioning what I consider my error in outlook in case it may help another member.
have a good one folks

Jimmy Cook

03/30/17 ‐ 11:40am ET March 30, 2017 at 11:40am ET

I may be counting my chickens but if it hits target price of $49 is it a sell? What are you experts looking at in the way of charts etc. I hope I don’t jinx this by asking.

Jim Pearce

03/30/17 ‐ 11:43am ET March 30, 2017 at 11:43am ET

The 3-month target holding period for BBY expires next week anyway (April 5), so I will sell it if/when it trades at the target price before then.

black arrow

03/30/17 ‐ 11:53am ET March 30, 2017 at 11:53am ET

If I were u Jimmy I would be pulling the sell trigger, here is why if you look at the chart it is a parabolic rise recently I have read beware of parabolic rises. On my chart I see RSI over 80 that is very high. I would be very happy. Your decision ultimately of course just my 2 cents

Jimmy Cook

03/30/17 ‐ 11:55am ET March 30, 2017 at 11:55am ET

Thanks for the advise.

black arrow

03/31/17 ‐ 11:54am ET March 31, 2017 at 11:54am ET

Sell Now Jimmy or whomever it is at the target!! Yahoo!

Jimmy Cook

03/31/17 ‐ 1:12pm ET March 31, 2017 at 1:12pm ET

I did. Nice win to end the week.

Jim Pearce

03/31/17 ‐ 1:24pm ET March 31, 2017 at 1:24pm ET

I just issued the sell alert; good work everyone!

black arrow

03/31/17 ‐ 2:01pm ET March 31, 2017 at 2:01pm ET

Jimmy I am delighted to hear you did well. It isnt easy, but Jims service really can make a difference.
Good job Jimmy and you as well Jim Pearce!

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