Oppenheimer upgraded Best Buy Co., Inc. (BBY), Thursday, giving the retailer an outperform rating with a $50 price target.
It's Insane!
The top, in my opinion, is now in. First, who in the world would upgrade a stock that is already up 250% in the last year? Where was the upgrade when it was trading under $12 per share? This is just insanity and classic chasing by an analyst who was late to the party. If you look at stocks like Apple (AAPL) you can clearly see that upgrades at epic highs tend to mark a top in the stock.
Next, the technical chart is not only extremely overbought, but it just filled a major gap. And that represents a major level for a pull back that should begin as early as Friday. Lastly, for those that have learned the PPT Methodology, please note the daily time count. Just another signal the stock is ready to pull back.
Ready For A Pull Back
Best Buy has had a great run. I'm not looking to take anything away from it. I am just recognizing that the stock is ready to pull back over the next few months.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com