The near term base-like pattern that has developed in Best Buy (BBY) since its earnings-related plunge into the December 21 low at 33.40 is starting to make some headway on the upside.

After holding near-term support at 34.00 last week, BBY has turned up to break above key near-term resistance at 34.40/50, which initially triggered short covering that spiked the stock to 34.90 so far. That 34.90/35.00 area represents key near-term resistance, which if hurdled and and sustained later today will trigger more short covering and new buying that projects to 36.00/50 next.

At this juncture, only a decline that breaks 34.00-33.90 will compromise the current oversold and favorable near-term technical set-up.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.