Build-A-Bear Workshop v1.1: Charts

$BBW: Charts & volume analysis before fundamental analysis

Starting with the weekly chart and 10-WMA

As I’ve alluded in my previous post on Build-A-Bear Workshop going into 2Q ‘23 ER on 8/24, the weekly chart is exhibiting patterns of staircasing and breaking out on corporate event(s), e.g., surprise ER beat and special dividend announcement.

Here’s a look at the daily chart with Elder bars showing a strong momentum; however, I’m more inclined to think that it’s slightly overbought at the moment leading into ER. It was somewhat of a confirmation on 8/11 when it was rejected again at $26.

BBW has a small float of 13.44M shares with outstanding at 14.46M. It doesn’t take much volume to move in either direction. A few pointers on the chart:

• Upside momentum as the 9-day RSI indicator is very strong.

• Slightly overbought on a Slow STO % above 80.

• There’s been more volume on up days than on down days the last 21 days, a bullish quality.

• SMA above 50-day going into ER, a strong technical guidance.

As for my position, I cut about half of my position on 8/11 after opening the LEAPS position around Q1 ER. Here’s an hourly chart on a 3-month timeframe.

It's more than likely that it'll pull back in the next 10 days unless the market decides to ramp up heading into its results. My preference is a pullback, followed by staircasing, to add more to the existing position.

Disclaimer: I have a long position in BBW, with out-of-the-money LEAPS expiring on January 19, 2024, aiming to capitalize on the potential surprise.