New BlackBerry Price Target After Stock Takes Back Key Level
The phone manufacturer turned software company has been a lucrative trade lately and the chart is jumping out once again.
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Readers may recall that, about six weeks ago, after BlackBerry BB reported the firm's fiscal fourth quarter financial results.
For that period, which ended February 28, the firm posted an adjusted EPS of $0.03 on revenue of $141.7 million. Those numbers beat Wall Street's expectations, despite the fact that the revenue print reflected an 18.1% contraction from the year-ago comparison. Guidance, at the time, was a little sloppy.
For the current quarter, BlackBerry guided revenue toward a range spanning from $107 million to $115 million, which was below the consensus view for a rough $128 million. Adjusted EPS was seen at -$0.01 to break even. Wall Street had been looking for roughly $0.02.
For the full year, BlackBerry projected revenue generation of $504 million to $534 million, which was below the consensus view for about $548.3 million. Adjusted EPS was seen at $0.08 to $0.10, which was in line with the $0.09 that Wall Street had in mind.
That Said...
All three of the firm's business units had beaten expectations coming in, and you may remember that I was encouraged by what I saw in the technicals. It looked at the time that maybe the struggle of the quarter past and the quarter ahead had already been priced in. Readers may remember this chart:
I wrote this on April 2:
"Readers will see that from late 2024 through to the present, BlackBerry built a head and shoulders pattern with a neckline at about $4.10. That means that the sell-off might be close to done in his name, for now. If one was short, the target likely would have been reached this morning. Additionally, the 200-day SMA, which is where the pattern began in early December, showed up as support."
I added, "I want to buy a few of these shares as a spec(ulative long) position. I will wait for this piece to hit publication, so readership will get first crack, but once this piece is public... I will initiate this name."
Well, I did initiate a long position in BlackBerry as advertised, once that piece had been public and readers had first crack at the name. My average price is $3.09. I saw the stock trading at $3.95 on Wednesday morning. That's a 28% gain for those who followed me through that window. Let's take a new look:
Since taking back that all-important 200-day SMA, BlackBerry has now also taken back its 21-day EMA and 50-day SMA. That puts the swing traders and whatever portfolio managers are willing to invest in single-digit stocks all on the same page. That 50-day line is our pivot.
Readers will also see a greatly improved reading for relative strength that is quite robust, but not technically overbought. The daily MACD is also improving rapidly. Since last writing to you on this name, the histogram of the nine-day EMA has gone positive, the 12-day EMA has crossed above the 26-day EMA and the 12-day EMA has gone positive. Once that 26-day line goes positive, and it's close now, this stock's MACD will be postured quite bullishly.
BlackBerry (BB)
Target Price: $4.75
Pivot: 50-day SMA (currently $3.80)
Add: Down to the rising 200-day SMA (currently $3.30)
Panic: Loss of the 200-day SMA.
At the time of publication, Guilfoyle was long BB equity.
