Well, the old guard has been removed now and all the short sellers of BBRY shares must now know that BBRY, after the recent salary-whacking, will not BK any time soon. The shorts were holding hopes of running it into delisting where it would trade for pennies and then eventually BK after the old CEO burned through all the cash. Since that now will not happen, the shorts are now trying to sneak out the back door, covering their shorts while everyone is out for the holidays hoping that the market won't notice.
Too late, we noticed. At least I did. The herd will not be far behind.
This company is waaaaaaay oversold even after its 50% move up over the past 10 trading days. Smart people will see this opportunity and begin to dollar cost average into this one at these prices. We may or may not see the pull back modeled below. The chart below would be fairly normal for a new bull market for a stock like Alcoa which was not nearly as shorted as BBRY was because people know Alcoa will bounce the next time that inflation happens. But tech companies go BK all the time and so it is safer to short a dying tech star than it is to short the 2nd largest aluminum refiner in the world. Because of this, I expect that the early moves in this will favor the upside with much smaller retracements than normal. 38.2% pullback instead of 50% or 61.8% for example. If that happens it is a sure sign that short covering is at play.
Keep the long term chart in mind for this one. That little blip in the lower right was this recent move. The first likely target is the black line which is at about $16. That's more than a 2 bagger and it will likely happen very quickly. After that I see next resistance at the orange line ($58). It could take 2 or 3 years to get there but it is a real possibility if the new mgt can show a turn around (and I think that they have a very good chance of doing it).
Unlike Alcoa, it doesn't seem to me that Black Berry had what it takes to be a successful company in the mid to long term: product. Windows phones have just outsold BBs. The refusal to migrate to Android, probably out of the not-designed-here syndrome that many, especially good, engineers have, has pretty much decided its fate. Unfortunately, Black Berry is s has-been company. By all means, those of a betting persuasion might enjoy the ride for the short term.
ReplyDeleteMany have and will say Alcoa is dead as well so I'm not so quick to write off a company. But my views on BBRY at present are mainly driven by the shape of its charts and not by the so call fundamentals. There are no trustable fundamentals AT ALL when you have a corrupt private bank like the "federal" reserve (they should rename themselves the "planetary reserve") interfering in markets and not letting natural losers be losers while preventing natural winners from winning. In other words, when it all finally swirls the bowl into the septic tank, IBM, Google, Apple will all go do at the same time. All have benefited from Corrupt Crony Capitalism. All will suffer when it collapses. It's one bit Ponzi, there are no real safe havens. When supply lines break down for lack of fuel or truckers then even gold and silver won't be of much use.
ReplyDeleteHi to all members on this community i am thanks to the administrator of this forum for approve my account i am sure here i got better knowledge thanks again. My name is Ronald.
ReplyDelete"Ronald", this is not a community. There are no accounts. I let your comment go through even though it sounds like the first sentence from a Nigerian 419 scam simply because you didn't include a link to your web site (which I am not interested in knowing about and which I will never post). If you want to participate then you are welcome to. I suspect that we shall not hear much from you again.
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