BlackBerry Stock Falls Below Support In A Pattern: What's Next?

Blackberry Inc. BB announced Monday that it agreed to sell its legacy patents for $600 million.

BlackBerry entered into the patent sale agreement with Catapult IP Innovation Inc. The company agreed to sell substantially all of its non-core patent assets to Catapult IP Innovation.

Blackberry was trading 4.06% higher at $8.20 midday Monday. 

See Related: Why BlackBerry Shares Are Trading Lower Today

Blackberry Daily Chart Analysis

• Shares fell below support early Monday morning, but have since recovered the level in what traders call a falling wedge pattern. This shows the stock was able to recover and bounce back to hold above a level where it has been able to in the past.
• The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue). This indicates bearish sentiment, and each of these moving averages may hold as an area of resistance in the future.
• The Relative Strength Index (RSI) saw a jump higher Monday and now sits at 40 on the indicator. This shows that buyers have moved into the stock today, but sellers still outweigh the amount of buyers overall.

What’s Next For Blackberry?

Blackberry faked a break below support as they dropped below the level, but the stock was quickly able to recover and push back higher. The climb back above support shows that the stock is still seeing strength and is not ready for a strong period of bearish movement yet. 

Bearish traders are looking to see the stock hold below the support line and have the RSI fall into the oversold range. Bullish traders are looking to see the stock recover the support line and begin to form higher lows, eventually crossing above the moving averages.