One of the best buys out there, Best Buy

• Posted by Greg Harmon
• on September 1st, 2015

This big box store had been left for dead a year ago. Known as the showroom for Amazon.com, people would browse and try out products before ordering them from Amazon, sometimes without even leaving the store! So what happened? You can go to any number of analyst reports to see about the health of the company. I am less concerned with that.

What gets me excited is that the stock is showing relative strength to the market during this broad correction. In fact it is showing real strength too. The chart below shows that it had been in a downtrending channel after peaking at $42 in February, right after the Superbowl. It hit the bottom of the channel last Monday as the market gapped lower. But since then it has continued to move up, despite the stalls and reversal in the broad market.

Tuesday sees the the price pulling back minimally, but still above the recent resistance area, which could turn into support at 35.30. A bit of consolidation or pullback after a 30% run higher can help reset the momentum indicators. Even a pullback to 34 would not be bad for the chart. Perhaps place a buy order at 34 or sell the September 34 Puts (at 65 cents as I write) for a possible short term entry.

Get my ebook, Markets for 2015 and Beyond, a long term forecast with all proceeds going to charity.

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