Bed Bath & Beyond, Inc (NASDAQ:BBBY) surged over 24% Tuesday on increasing investor interest.

The high amount of short interest in the stock likely prompted traders to rush into Bed Bath & Beyond. The most up-to-date data indicated Bed Bath & Beyond has 38.75% shares held short.

Bed Bath & Beyond topped out at the 21-day exponential moving average (EMA) Tuesday, which often acts as a support or resistance level. On Wednesday, the stock opened slightly lower into an inside bar pattern and by late morning, Bed Bath & Beyond was attempting to bust up through Tuesday’s high-of-day and regain the 21-day EMA as support.

An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.

An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar and each is called an "inside bar."

A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Bed Bath & Beyond Chart: Bed Bath & Beyond was having difficulty breaking up bullishly from Tuesday’s mother bar and regaining the 21-day EMA due to lower-than-average volume. The stock may need to consolidate for a longer period before gaining the strength to bust up through the areas.

See Also: Why Taysha Gene Therapies Shares Jumped Over 97%; Here Are 70 Biggest Movers From Yesterday

Photo: Shutterstock