The Blackberry stock price sank to its lowest level in 2 weeks. BB has now lost ground in 7 out of the last 10 sessions. So is the comeback over?
BlackBerry (BB:NYSE) closed the day at $12.88, lower by $1.11 (-7.93%)
This month’s price action in BB is starting to look spookily similar to January’s. At the start of the year, Blackberry, along with other so-called meme-stocks enjoyed a blistering run of form.
However, for the most part, the Reddit-fueled rallies were short-lived.
In October 2020, the BlackBerry stock price was languishing below $4.50 per share. A month later, it had more than doubled to $9.69. By January, BB had gained over +550% to a multi-year high of $28.77.
Over the next 4 months, BlackBerry trudged lower. And by May, it was back trading at single digits, below $8.00.
The meme stock story of January roared back to life around 4 weeks ago. AMC entertainment and Gamestop burst higher, taking BB along for the ride.
However, unlike AMC, whose short interest reached new highs in May, only 8% of BlackBerry’s available float has been lent to sellers. So BlackBerry is not as prone to a short-squeeze as some may think.
The recent run to $20.00 was fleeting. And again, similar to January, the BlackBerry stock price has corrected sharply lower. BB has given back 37% from the 3rd of June high.
Looking at the 4-hour chart, we see that the stock has retraced most of its vertical breakout. After clearing horizontal resistance at $12.15 on the 1st of June, BB added 65% in the following 2 days. So I consider $12.15 to be a major support level.
The price is fast approaching this support. And how BB reacts at this threshold will be key to its prospects. A close below $12.15 would suggest the price will head even lower.
In that instance, $9.60 is the next target. Following that, the trend line support around $8.00 would be the next logical stop.
Of course, BlackBerry may find some technical support above $12.00 and consolidate for a while. That scenario might indicate the bulls have not yet surrendered.
However, given the negative trajectory, I would favour the former.
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