Bed Bath & Beyond Inc. (BBBY) missed earnings estimates back on Sept. 16 and gapped lower by 18.5% on Sept. 17, even though the stock was "too cheap to ignore" with a P/E ratio of 8.29 and dividend yield of 3.40%. The retailer of products for the home is even cheaper before its earnings report to be released on Wednesday, Jan. 9. Today, the P/E ratio is just 4.60, and the dividend yield is up to 5.36%, according to Macrotrends.

Bed Bath & Beyond stock closed Friday, Jan. 4, at $11.95, up 5.6% so far in 2019 but solidly in bear market territory at 50.5% below its Jan. 24, 2018, high of $24.08. Its Christmas low was $10.45, set on Dec. 24.

The company is a major retailer of products including bed sheets, bath soaps and beyond to kitchenware. Analysts expect Bed Bath & Beyond to post earnings per share of 17 cents when the company reports earnings after the close on Wednesday, Jan. 9. Same-store sales and guidance on foot traffic will determine whether the stock will react positively or negatively after earnings.

The daily chart for Bed Bath & Beyond

Daily technical chart showing the performance of Bed Bath & Beyond Inc. (BBBY) stock
MetaStock Xenith

Shares of Bed Bath & Beyond have been below a "death cross" since the week of June 16, 2015, when the stock closed at $69.68. A "death cross" occurs when the 50-day simple moving average falls below the 200-day simple moving average and indicates that lower prices lie ahead. Notice how the stock failed at its 200-day simple moving average at $20.88 between July 6 and July 10 as an opportunity to reduce holdings. There are two horizontal lines on this chart – my semiannual value level at $10.38 and my monthly risky level at $13.43.

The weekly chart for Bed Bath & Beyond

Weekly technical chart showing the performance of Bed Bath & Beyond Inc. (BBBY) stock
MetaStock Xenith

The weekly chart for Bed Bath & Beyond will end this week positive if the stock closes the week above its five-week modified moving average of $12.23. The stock is well below its 200-week simple moving average, or "reversion to the mean," at $38.07. The "reversion to the mean" was last crossed during the week of July 24, 2015, when the average was $66.93. The 12 x 3 x 3 weekly slow stochastic reading is projected to end this week at 17.52, up from 11.99 on Jan. 4. This means that this reading could be above the oversold threshold of 20.00 a week from now. When the stock was testing its Christmas low, this reading was below 10.00, which is an indication that the stock is technically "too cheap to ignore."

Given these charts and analysis, investors should consider buying Bed Bath & Beyond stock on weakness to my semiannual value level at $10.38 and reducing holdings on strength to my monthly risky level at $13.43.

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.