Consumer durables retailer Best Buy Co., Inc. (BBY) reports earnings before the opening bell on Wednesday, Feb. 27, with the stock in a slow recovery below a "death cross" that formed on its daily chart on Nov. 14. The weekly chart is positive after the stock ended 2018 with a "too cheap to ignore" stochastic reading. The stock also held its "reversion to the mean" at its Dec. 24 low.

Best Buy stock closed Monday, Feb. 25, at $60.55, up 14.3% so far in 2019 and in bull market territory at 26.9% above its Dec. 24 low of $47.72. The stock is also in bear market territory at 28.2% below its all-time intraday high of $84.37 set on Aug. 22.

Best Buy reports earnings with a favorable P/E ratio of 11.90 and a dividend yield of 2.98 according to Macrotrends. Analysts expect the retailer of appliances, TVs and accessories to post earnings per share of $2.57 when it reports results before the opening bell on Feb. 27. Analysts expect a positive trend in holiday foot traffic and increased sales given consumers' lower tax rate. The retailer should also show improved e-commerce sales as it better competes with Amazon.com, Inc. (AMZN).

The daily chart for Best Buy

Daily technical chart showing the share price performance of Best Buy Co., Inc. (BBY)
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Best Buy stock declined by 43% from its all-time intraday high of $84.37 set on Aug. 22 to its Dec. 24 low of $47.72. This bear market has been consolidated since the Dec. 24 low, but a "death cross" formed on Nov. 14, when the 50-day simple moving average fell below the 200-day simple moving average to indicate that lower prices would follow. This remains in play, with the 50-day and 200-day simple moving averages now at $56.68 and $69.41, respectively.

The stock closed Dec. 31 at $52.96, which resulted in the key levels from my proprietary analytics. My annual value level is $46.20, with my semiannual pivot at $60.19 and my quarterly risky level at $82.17. The close of $59.24 on Jan. 31 resulted in my monthly risky level at $68.35. My weekly risky level is $65.50.

The weekly chart for Best Buy

Weekly technical chart showing the share price performance of Best Buy Co., Inc. (BBY)
MetaStock Xenith

The weekly chart for Best Buy is positive, with the stock above its five-week modified moving average of $59.37 and is above the 200-week simple moving average, or "reversion to the mean," at $50.24, last tested during the week of Dec. 28, when the average was $49.30. The 12 x 3 x 3 weekly slow stochastic reading is projected to rise to 57.73 this week, up from 49.93 on Feb. 22.

Trading Strategy: Buy shares of Best Buy on weakness to the 200-week simple moving average and my annual value level at $50.24 and $46.20, respectively, and reduce holdings on strength to my weekly and monthly risky levels at $65.50 and $68.35, respectively. My semiannual pivot is at $60.19.

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