BlackBerry Ltd: BBRY Stock Chart Suggests an Easy Double

BBRY StockBBRY Stock: Finally Bottomed?

Something significant happened when BlackBerry Ltd (NASDAQ:BBRY) announced its earnings on September 28, 2016, and perhaps many investors and the general public dismissed this event because the poor performance has effectively turned everybody away from this name.

I caught this significant event and I am going to share my findings.

I use the price charts of companies as a tool to help me discern trends. This is where my ventures begin, and then a disciplined trading strategy follows. Being on the correct side of a trend is the single-most important factor to a profitable trading strategy, aside from managing risk.

I have reason to believe that BBRY stock is attempting to solidify a  multi-year bottom. If I am correct, the path of least resistance will be toward higher prices as a trend reversal is finally confirmed.  There is a caveat to my findings, as there is still some criteria that need to be met.

Th following chart illustrates the price pattern that has just been broken.


Chart courtesy of

BBRY stock has spent four years bouncing off support at $6.00. In the process, BlackBerry stock has put in a pattern known as a descending triangle. There are two converging trend lines that represent support and resistance that make up this pattern. It is common for these triangles to have five points of contact, and these patterns have a tendency to break out toward a new trend once the triangle is 70% complete.

This triangle pattern is special because, if I am correct in my observations, this pattern will mark the end of a trend. A break higher out of this pattern signals that a trend reversal is in play and that the bear market in BBRY stock may now be behind it.

The first-order price objective on such a pattern would be point 1 on the above chart, where the triangle first began. This constitutes a target price of $18.00 and represents a return of 116%, meaning BlackBerry stock would effectively double from its current levels.

In order to confirm that this move is an actual breakout, BBRY stock needs to close this week above the line that represents resistance, and not close back below this line next week. If this does not occur, the breakout would be deemed a failure and would carry bearish implications.

The following BlackBerry stock chart illustrates a signal that reinforces the potential for a sustained breakout.


Chart courtesy of

In September, BBRY stock generated a golden cross. A golden cross is a bullish signal that is produced when a faster 50-day moving average (highlighted in blue) crosses above a slower 200-day moving average (highlighted in red). This indicator confirms that the bulls are in full control of BlackBerry stock, and I always found it wise to never trade against this indicator.

It is not a coincidence that the descending triangle—which lulled most investors to sleep—was finally broken after a bullish golden cross signaled that the bulls are now in full control of BBRY stock.

The following BlackBerry stock chart illustrates the breakout on an hourly basis.


Chart courtesy of

There are two parallel lines that define this trend. The pattern is known as an ascending channel. An ascending channel has two trend lines that define the upper and lower bounds. The share price oscillates between these two lines for as long as the trend permits. A trend reversal occurs when shares finally gather enough strength to break out from this channel.

The price action within the channel supports the bullish premise, as an impulse wave carries prices higher, and a consolidation wave serves to digest the gains from the surge in price. A new impulse wave will develop when the consolidation wave is complete.

Impulse waves that are separated by consolidation waves in between have commonly produced runs of similar height and duration. Based on this premise, BlackBerry stock will run to at least $8.60 before another consolidation wave can begin.

The Bottom Line on BlackBerry Stock

For the first time in a long time, BBRY stock may have waved the white flag, and the bears have finally thrown in the towel. My bullish bias is centered on the breakout, and that breakout needs to be confirmed by pricing action this week and the following week. This criteria will need to be met in order for me to have full confidence in the pattern break and the implications surrounding it.