Best Buy Stock Could Rally with Help From Analyst Upgrades

BBY's 40-day moving average has acted as support

Jul 5, 2017 at 10:27 AM
facebook X logo linkedin

In late May, retail stock Best Buy (NYSE:BBY) gapped higher from its 40-day moving average thanks to a strong showing in the earnings booth. More recently, the shares have pulled back from their post-earnings peak, only to find support from the 40-day once again. With the stock pushing higher from this trendline -- up 88% over the past 12 months -- it seems like a good time to join BBY on its next leg higher.




Plus, there's still plenty of pessimism around Wall Street that could unwind and fuel an extended rally for Best Buy. For starters, analysts remain skeptical, with nine of 14 covering firms dishing out "hold" or "strong sell" ratings. It wouldn't be surprising to see upgrades come through and provide a lift for BBY.

Even options traders seem to be taking a bearish approach. Specifically, the shares have a Schaeffer's put/call open interest ratio (SOIR) of 3.37. Not only does this show put open interest more than triples call open interest among options set to expire within three months, but it also ranks just two percentage points from an annual high. This means short-term options traders are unusually put-skewed, and the stock could benefit as the hedges related to these bets begin to unwind.

Finally, it's a good time to target Best Buy options. This is based on the stock's Schaffer's Volatility Index (SVI) of 22% -- an annual low. In other words, near-term options are relatively cheap, from a historical volatility perspective.

Subscribers to Schaeffer's Weekend Trader Series options recommendation service received this BBY commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI