BlackBerry Ltd: This Chart Shows More Downside for BBRY Stock
BBRY stock: Any Hope for the Bulls?
I find it hard to describe the performance of BlackBerry Ltd (NASDAQ:BBRY) stock in just one word.
BBRY stock peaked in June 2013, tagging a high price of $148.13 per share. However, currently, BlackBerry shares are trading at $7.66. This represents a loss of 94.8% for BBRY stock. A complete and utter disaster, share price has been completely decimated.
At one point, BlackBerry actually dominated the market. The company’s handset was a symbol of social status. Everyone who was anyone had a Blackberry device; friends, family, even I had one. I will even credit BlackBerry with launching the texting revolution.
Amazing how times have changed, though. Today, finding anyone with a BlackBerry device is difficult to say the least. It’s probably easier to find a rare Pokémon.
So, one questions remains (well, technically two): why would anyone invest money in BBRY stock? Is Blackberry going to stage a come back?
I do not have a crystal ball that can foretell this future, but perhaps my good friend, the stock chart, can help shed some light. The trend is indeed your friend.
Following is the 10-year weekly chart for BBRY stock:
Chart courtesy of www.StockCharts.com
During the week of August 17, 2009, BBRY stock confirmed a death cross—a bearish signal that appeared on this chart when the 50-week moving average (MA) crossed below the 200-week MA. Traders use this signal to confirm a bear market is on the horizon. In its typical form, traders looking for a death cross would use a chart showing daily intervals, but a weekly scale is also a good measure of the long-term trend.
Following the signal, BBRY stock proceeded to fall from $77.00 to the current price of $7.66, a 90% loss. Using the death cross as a signal to step aside would have helped in preserving one’s wealth.
The bad news for the bullish camp is that the death cross remains in full force. The moving averages began to converge in 2015, but nothing came of it.
The trend on the BBRY stock chart is from the upper left to the lower right. Lower lows and lower highs dominate the landscape. This is clearly a downtrend.
If you look closely at the BBRY stock chart below, you will notice a technical pattern that has emerged.
Chart courtesy of www.StockCharts.com
Since the summer of 2014, each and every time BBRY stock approaches $6.20, investors step in to support the price. Each subsequent rally ends at a lower high, as investors are willing to exit positions at lower prices. This is known as distribution and the price action has generated a descending triangle.
Descending triangles, on average, have a higher probability of breaking to the downside, but they can break higher, too. Triangles tend to breakout when they reach 70%–75% of the pattern.
BBRY stock is currently sitting at that exact point where a breakout is expected. The odds favor a break to the downside. This serves to only reinforce the bear camp.
The Bottom Line on BBRY Stock
If BBRY stock is a core holding in someone’s portfolio, I am really sorry to say that I have little to offer in terms of good news. The bearish trend is embedded and the odds favor the next move being to the downside.
I found it hard to find anything that could spin a positive light for the bullish camp. If you are looking for hope and you are an Elliot Wave enthusiast, then perhaps the next low will mark the final fifth wave to end this bear. The problem is that the word “hope” is not conducive to a good investment strategy.
