BlackBerry Rebounds From Post-Earnings Dip: What's Next?

BlackBerry Ltd BB fell on Friday following the company's earnings print. The stock staged a rebound Monday and made up its losses.

For the first quarter of 2022, BlackBerry reported revenue of $174 million, beating the consensus estimate of $171.25 million, and a net loss of 5 cents per share, which was in line with analyst estimates. A number of analysts downgraded BlackBerry, which led to the stock closing down 4% on Friday.

On Monday, the dip was bought and the stock shot up over 5%. Although the Canada-based company is liked in a number of Reddit communities, institutions came in and purchased $451,634 worth of call contracts during the trading day. A number of the option traders paid above the asking price for their calls.

Monday’s reversal slammed BlackBerry’s stock into some heavy resistance levels, but there are bullish signs on the chart.

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The BlackBerry Chart: BlackBerry’s stock may be trading in a falling channel that began on June 8. Within the channel, BlackBerry has been making consistently lower lows and lower highs but has been bouncing from the lower trend line of the channel on each touch.

On Monday, BlackBerry printed a green engulfing candlestick and closed almost at its daily high. This indicates higher prices may come in the future. The stock has three resistances, that have aligned, it will need to break through first: The top sloping trendline of the channel, a resistance level at $12.89 and the eight-day exponential moving average (EMA).

BlackBerry is trading just below the eight-day EMA and on Monday wicked from it. The stock was able to recapture the 21-day EMA as support and this could help to push it back up over the eight-day EMA. The eight-day EMA is still trending above the 21-day EMA, which is bullish. BlackBerry is trading above the 200-day simple moving average, indicating overall sentiment is bullish.

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Bulls want to see BlackBerry’s stock bust through its three upper resistance levels on bullish volume. If the stock can clear the $13 area, it has room to move up toward $14.28.

Bears want to see BlackBerry continue to reject its upper resistance levels and for it to continue to trend down in the channel until it loses support of the 21-day EMA and support at $11.72. A loss of the levels as support could cause the stock to revisit the $10.68 level.