What's your opinion of BlackBerry?
Thanks for the assignment.
This will be the tenth time that I explore the potential for BlackBerry Ltd. since 2008. The last analysis was conducted on Oct, 23, 2013 on a request from Serge. The stock was trading for $8.48 and he wanted to know my thoughts. The conclusion from the research was that the stock was more of a gamble than an investment. The patterns that concerned me at the time were an established downtrend, a death cross, and resistance along the 50-day moving average.
Retrospectively that was the right call. The stock continued to give up ground retreating to a 52-week low of $5.79 in December of 2013 before catching a bounce to nearly $12.00. The market has responded well to some of the tactics and strategies put in place by John Chen who was brought in as CEO in November of 2013. Chen outsourced production of its devices, and sold the company's Canadian real estate to raise cash in an effort to stabilize the enterprise. A return to growth is still in the future.
Another investigation of the charts will help identify how best to proceed with this stock.
The three-year chart depicts the lift the shares have enjoyed since the December 2013 lows. Over the course of the advance the stock price has moved above the 50- and 200-day moving averages and is looking to build a base along $10.00. Worth noting is the resistance that has come in near $12.00. If BB can move through $12.00 with conviction it won't have much to hold it back until close to $15.00. The next flex point will come on March 28 when the company reports its fourth-quarter and fiscal year results.
The six-month chart illustrates the buy signals generated by the MACD and the RSI in December. The move higher topped out in January as the shares become overbought. Currently the stock is retesting support at $10.00 and the 200-day moving average and has established a range with resistance at $12.00. Currently the momentum indicators are neutral at best.
The best approach with regards to this stock would be to trade it in the range until there is more clarity as to direction.
Make it a profitable day and happy capitalism!
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