As you well know, I have been focused on BBRY which has delivered a 20% gain for the month since I first alerted it to everyone here on Stockal. You probably might think that it is boring watching a stock for weeks at a time, but that’s how the real money gets made folks. It looks like there is still strong accumulation on this particular name and traders are bidding this up on the dips. BBRY has been great to those who are long since the begin of April and I see no reason why it should stop.
The short interest and the short ratio remains high and I would hate to be short this stock. History is about to repeat itself. The stock is beginning to see strong accumulation again, and last time we saw this kind of action (September 2012), BBRY went on to provide traders with massive gains in just few months (nearly 200%). While we can’t guarantee it will play out just like last time, I certainly believe it’s possible. With over 45M shares short since 15/05, it is inevitable that the short sellers will soon cover their bad positions. From my calculations, some of them are still in big a loss and in panic mode.
From a technical standpoint and based on this monthly chart, the stock broke the descending triangle to the upside last month and the target of the pattern is $20 approx. Plus, for the first time in more than 9 years the MACD fast line crossed above the center line, which is a strong bullish signal. Judging from Blackberry stock past performance, history is on the verge of repeating itself.
Stockal also has an interesting trend analysis on BlackBerry – Confidence Meter, while still at a lowly 36%, has actually gone up a third from 27% in the last month or so. So Wall St confidence in the stock and the company has certainly been going up.
This is a guest post by António Costa, acclaimed trader and the popular author of AC Investor Blog. All views and analysis belong to the author.