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Fan Yang

Best Buy (BBY) Testing Key Pivot After Pullback; I am Eyeing $53

Best Buy $BBY has been retreating in May after rallying from a low of almost $48 to a high just under $76. On the daily chart you can see how price formed a triple top and then fell sharply. 

BBY Daily Chart

(click to enlarge)

Challenging Bullish Structure:
- The bullish trend since late 2018 is now being challenged.
- Price has already fallen below the key moving averages (200,100, and 50-day).
- Also, the RSI fell below 40 and even tagged below 30, which shows the return of bearish momentum.
- Still I think the $60-$63 area is a key support area for the bullish outlook.
- If price can hold above this area, I think BBY might still have a chance.
- The thing is, I am not a fan of consumer staples right now. 
- There might be some "stickiness" around/above this $60 area, but there is too much risk for price to fall back towards the 2018 lows in the $48-$50 area.
- Perhaps, it won't reach this low and find support closer to the $53 area, where we see the 200-week simple moving averages. (See weekly chart below).
- The market was pricing a trade war in the late 2018 dip. Since the current dip is also based on the same factor, the downside might not be as low this time around.
- I have most of my free cash allocated for other names, but BBY at $53 is interesting to me. I will be setting an alarm around $55. 

BBY Weekly Chart

(click to enlarge)

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