BlackBerry Stock Squeezes Higher — Can It Smoke Shorts Again?

On Tuesday, BlackBerry Ltd BB announced its QNX OS for Safety technology will deploy in South Korea’s s Traffic’s Communications-based Train Control System. On Monday, the company announced it had launched Jarvis 2.0, a SaaS version of its original flagship software composition analysis tool to address the increasing global complexity and growing cybersecurity threats.

On Wednesday, BlackBerry’s stock rallied over 8%. The stock may have been slow to react to its news but for technical traders, BlackBerry was bound to break up bullishly from a pattern on its chart.

Regardless of the reason, the move north move is likely to catch the eyes of a number of Reddit communities who like the stock due to its underlying statistics:

• BlackBerry has a relatively small float of 566.41 million shares with high institutional ownership at 41.51%.
• 7.42% of BlackBerry's shares are held short although that number has decreased slightly in July.

See Also: How to Buy BlackBerry Stock Right Now

The BlackBerry Chart: BlackBerry’s stock has been trading down in a bullish falling wedge since June 7, shortly after a six-day long short-squeeze in May propelled the stock up 132% to a high of $20.17. Within the falling wedge, BlackBerry has been making consistent lower highs and lower lows until it reached a bottom on Tuesday and reversed course.

When BlackBerry hit a support level at $9.66 it created a bullish double bottom pattern because the stock also reached the same level on July 19 and bounced. On Wednesday, the double bottom pattern was recognized and helped to propel BlackBerry to break up bullishly from the falling wedge and momentum allowed the stock to shoot up through a resistance level at $10.54.

BlackBerry is trading above the eight-day exponential moving average (EMA), which is bullish for the short term, but below the 21-day EMA, which it wicked from and rejected Wednesday morning. The eight-day EMA is trending below the 21-day EMA and bulls want to see the eight-day EMA cross above the 21-day EMA in the future.

BlackBerry is trading above the 200-day simple moving average (SMA), which indicates overall sentiment in the stock is bullish. The 200-day SMA is also trending upwards which could help guide the stock higher.

• Bulls want to see BlackBerry’s stock regain support of the 21-day EMA and for bullish volume to pop it back up over resistance at $11.72. If the stock can regain the level as support it could trade back up toward the $12.69 mark.
• Bears want to see BlackBerry fall back down below the $10.50 area and for it to lose support of the eight-day EMA. If BlackBerry’s stock loses the level as support it could fall below the 200-day SMA which would be a bad sign for the bulls.

BB Price Action: Shares of BlackBerry were trading around $10.70 at publicaiton time, up 8%.