Bed Bath & Beyond Inc. (BBBY): BBBY Stock Issues Death Cross – Sell Now

Bed Bath & Beyond Inc. (BBBY) — This retail chain operates 1,500 superstores that sell domestic home furnishings. Competition in a difficult retail environment, a higher tax rate, unfavorable exchange rates, high employee benefit packages, the encroachment of e-commerce and price transparency are squeezing operating margins.
Credit Suisse Equity Research noted EBITDA growth was only 1.3% in the fourth quarter of fiscal 2014 (ended Feb. 28) and down for the full year. Credit Suisse and S&P Capital IQ recently lowered their earnings and price targets on BBBY stock.
Management’s goal is to open 30 new stores with the intent of increasing square footage by 1% to 3%, but the risk of an unexpected decline in consumer spending and the trend toward online shopping makes this approach risky.
BBBY stock broke down in early April from a triple-top at about $78. The stock descended into a channel down with resistance at its 50-day moving average, now at $71.24, and the descending resistance line.
Last week, the 50-day moving average crossed down through the 200-day moving average, a long-term negative signal called a death cross, ending a rally at the 50-day moving average on Friday.
On-balance-volume has been trending lower since January, indicating the bear market in BBBY stock is far from over. Insider selling has been high for the past 12 months and very high in the past three months. Nasdaq.com shows 21 insider sells representing 307,707 shares in the past 90 days and zero insider buys.
Sell BBBY stock if you own it. Traders may want to sell shares short at $71 with a downside target of $63 for an 11% profit.
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