BlackBerry Surges Following Q1 Earnings, Negates Trend: The Bull, Bear Case For The Stock

BlackBerry Ltd BB was surging over 13% on Thursday after printing better-than-expected first-quarter earnings.

The company reported earnings of 6 cents per share on revenues of $373 million, beating analyst estimates for a loss of 5 cents per share on revenues of $160.35 million.

The results caused bullish traders to rush into the stock and drive BlackBerry up toward a heavy resistance level near $5.50, where it stalled on short-term time frames.

The move higher also caused BlackBerry to negate its current downtrend. A downtrend occurs when a stock consistently makes a series of lower lows and lower highs on the chart.

The lower lows indicate the bears are in control, while the intermittent lower highs indicate consolidation periods.

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The BlackBerry Chart: BlackBerry negated its downtrend by rising above the most recent lower high, which was printed on June 16 at $5.18. Although the downtrend is no longer in play, BlackBerry will eventually have to retrace to print a higher low above $4.71 in order to confirm a new uptrend.

• On Thursday, BlackBerry left a gap below between $5.10 and $5.21, which is likely to be filled at some point in the future. When BlackBerry eventually retraces, the stock may form a reversal candlestick at the lower range of the gap, which could provide a solid entry for bullish traders who aren’t already in a position.
• If BlackBerry closes the trading day near its high-of-day price, the stock will print a bullish kicker candlestick, which could indicate higher prices will come again on Friday. The second most likely scenario is that the stock prints an inside bar pattern to consolidate Thursday’s spike higher.
• Bearish trades want to see BlackBerry eventually form a bearish reversal candlestick, such as a doji or shooting star candlestick, which could indicate the local top has formed, and a reversal is on the horizon.
• BlackBerry has resistance above at $6.19 and $6.83 and support below at $5.50 and $4.70.

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Photo: Blackberry