Blackberry Stock Is Inches Away from Breaking Out

BBRY stock
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BB Stock: A Downtrend Under Attack

It has been exactly a month since I last focused on BlackBerry Ltd (NYSE: BB) stock and a lot has transpired since then. On September 21, I published a report titled “The Blackberry Stock Price Action Supports Higher Prices” and in that report, I outlined key dynamics on the stock chart indicating that a move towards higher Blackberry stock prices was in the making.

On September 21, when that report was written, BB stock was trading at $9.84. Today, it is trading at around $11.22, representing a 14% return over a four-week period, which I would say is not too shabby of a return.

This was also not the first time I have expressed my bullish opinions on BB stock. I have been watching this investment for a great deal of time, because I had the inclination to believe that a bullish move toward higher stock prices was in the making.

This inspired my report that was published on April 6, titled “Reversal Pattern Implies Higher Blackberry Stock Prices,” in which I outlined the completion of an explosive technical price pattern implying that higher stock prices were on the horizon.

On that day, Blackberry stock was trading at $8.07, so its current price represents a 49.03% return over a six-month period—which is also quite impressive.

The method of analysis that has served me so well in generating these accurate views is called technical analysis. This method of investment research is predicated on analyzing price and volume data in order to get an idea of what the future may bring. I have spent the last two decades applying myself to this craft because I found out early that, when this method of investment analysis is applied correctly, the results are simply outstanding.

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This Changes the Game for BlackBerry Stock

I have my eyes glued to the BB stock chart because it is currently testing a very important and influential level of price resistance. This level of price resistance is what separates this stock from its current long-term bearish trend and a brand-new bull market.

It is safe to say that I am fairly excited because breaking above this level would suggest that much higher stock prices are on the horizon and, given the current market environment for equities, such an outcome is not only possible, but also probable.

The following Blackberry stock chart illustrates the level of resistance that I am currently watching with great anticipation.

Blackberry stock chart

Chart courtesy of StockCharts.com

The level of price resistance I am watching represents a level that is defined by a bearish trend that has been in development since 2008 after BB stock peaked at $148.13. This trend contains the quintessential characteristic that defines a bearish trend, which is a sequence of lower lows and lower highs.

This level of resistance currently being tested was created by connecting the sequence of lower highs, and the end result is a downtrend line. This downtrend line is what I used to define this bearish trend, which is currently still in development. It will remain in development as long as BB stock is trading below that line. Under such circumstances, I can only assume that lower stock prices will prevail.

Breaking above the downtrend line, on the other hand, would suggest that the bearish trend toward lower prices has met its demise and, therefore, a sustained move toward higher stock prices is a real possibility. I do not take such implications lightly, especially when the bearish trend has been in development for such a long time.

In order for a bull market to even exist, the first step would involve Blackberry stock closing above this downtrend line. This level of resistance currently sits at $12.00, and I am eagerly awaiting a close above it to indicate that a breakout has occurred, signaling that higher prices are in development.

Analyst Take: 

The bearish trend that has defined the bear market in Blackberry stock is currently under attack. In order to suggest that the bear market has come to end, which would open the door for a bullish price advance, BB stock needs to break above this level by closing above $12.00. At that point, I would have no problem saying that I am bullish on this investment going forward.