Bebe , a trendy retailer of stylish and upscale threads fashionable woman, closed 2.4% higher today. Early Friday, BEBE reported that a special committee of independent directors approved the repurchase of 5 million common shares from former Vice Chairman Neda Mashouf. Each share will cost the company $13.39, representing a 2.5% discount from Thursday's close.
The stock closed a hair's breadth shy of its 10-week moving average today. This intermediate-term trendline, together with the security's descending 20-week trendline, has guided BEBE shares steadily lower since late October. On the plus side, technically speaking, is that BEBE appears to be forming a base around the 14 level, which represents potential double-bottom support.
If today's strength perseveres into next week, enabling a breakout above the 10-week moving average, the shares could see some short-covering activity come into play. Currently, almost 23% of the equity's float available for trading is devoted to the short side, amounting to a short-interest ratio of nearly 5 days to cover. Should the bears decide to take profits or simply close their positions, BEBE shares might benefit in the form of ramped-up buying power.