On January 17, 2014, we posted Edson Gould’s Speed Resistance Lines for Best Buy (BBY) in an attempt to determine what the extent of the decline might be. From that posting we said the following:
“Best Buy has had a history of resting [at] the extreme downside target, currently at $14.78. However, we have split the difference and placed an intermediate downside support level of $22.34. Again, this is not a recommendation to buy or sell Best Buy, instead, it is an attempt to observe how closely the stock will adhere to the SRLs indicated in the chart.”
Nearly one year later, we can see that although the historical trend had been for BBY to decline to the extreme downside target ( at $14.78), the estimate of $22.34 was a fair assessment of downside risk as the stock has managed to vacillate at or above the ascending $22.34 level seen below.
The quality of Gould’s SRL has been fairly consistent and reasonably accurate. We look forward to introducing additional SRLs of stocks that have established a declining trend to determine downside targets. The conservative upside target for BBY is $44.85.
