BlackBerry Consolidates Its Bullish Break: What's Next?

BlackBerry Ltd. BB hosted a virtual Investor Fireside Chat on Wednesday with Mattias Eriksson, recently appointed President of IoT, and Tim Foote of Investor Relations. Eriksson, who joined BlackBerry in May, discussed the growth potential of the company and said it “is an exciting multi-year journey that has only just begun.”

Eriksson noted BlackBerry received 200 patents last year to demonstrate the opportunity BlackBerry has to continue growing its business. On July 6, BlackBerry received four additional U.S. patents including one for “Securing Data Storage of Personally Identifiable Information in a Database.”

On Thursday morning, BlackBerry’s stock was consolidating while the overall markets were quiet. Options traders used the small pullback in the stock to enter BlackBerry call contracts.

One trader purchased 420 BlackBerry calls and paid $3.05 which was above ask. The trader paid a total of $128,100 for the order and chose a strike price of $9 and a Dec. 17 expiry. This trader likely wants their calls to be heavily "in the money" when they expire to acquire shares.

See Also: How to Buy BlackBerry Stock Right Now

The BlackBerry Chart: On Tuesday, BlackBerry’s stock closed slightly above a falling channel the stock had been trading in since June 8 and above a resistance level near the $10.50 mark. On Wednesday, BlackBerry’s stock tested both levels as support and held above it and closed the day above the eight-day exponential moving average (EMA).

On Thursday morning, BlackBerry’s stock attempted a push north but sellers dropped the stock back down under support of the eight-day EMA. Decreasing volume in BlackBerry hasn’t helped the bulls to get much traction, but decreasing volume is usually followed by a large spike in volume which could mean a big move is imminent in BlackBerry’s stock.

BlackBerry is trading below the 21-day EMA and the eight-day EMA is trending below the 21-day EMA, both of which are bearish. BlackBerry’s stock is trading above the 200-day simple moving average (SMA), however, which is bullish for the longer term.

Bulls want to see big bullish volume enter to stock to drive it up firmly over the eight-day EMA. If it can hold the level, it has room to move up to $11.72 which would allow it to trade back above the 21-day EMA.

Bears want to see BlackBerry close below the eight-day EMA and the support level at $10.54. If BlackBerry can't hold the levels as support, and drops back into the falling channel, it could eventually trade below the 200-day SMA, which would be a bad sign for the bulls.

BB Price Action: Shares of BlackBerry were trading down 3.6% to $10.41 at publication time.