How will today's earnings affect the Blackberry Stock Price?

Summary:

The Blackberry stock price has spent the last week consolidating above a major support level. But today's earnings report may bring BB back to life.

The Blackberry stock price has spent the last week consolidating above a major support level. But today’s earnings report may bring BB back to life.

Blackberry (BB:NYSE) finished yesterday’s session at $13.14, down $0.27 (-2.01%).

In my report on the 17th of June, I discussed the BB price action and suggested:

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, I didn’t expect the consolidation to cover the whole week. This is undoubtedly a reflection of the apprehension ahead of the company’s Q1 earnings report released after todays close.

Analysts expect Blackberry to report a loss of $0.05 for the period, and project revenue will fall by 20% to $171 million.

But does this even matter to the Blackberry stock price? As I’ve mentioned before, the meme-stock rallies have nothing to do with revenue and everything to do with positioning.

BB still shows a relatively high number of short positions. Short sellers have borrowed over 50 million shares to bet against the stock price. This accounts for 9.01% of the available float and should be considered a high enough figure to facilitate a squeeze.

The danger for shorts would be a material improvement in this evening’s data, which would only encourage the retail army to buy more stock. How likely that is, is difficult to predict. What is easier to predict is a host of sweaty palms ahead of the numbers.

BB Technical Outlook

The daily price chart for BB shows the importance of the horizontal support at $12.15. The level was previously a significant area of resistance, and now the reverse.

Notably, the 50-day moving average may soon complete a bullish crossover of the 100-day. This would be considered a positive development, showing upside momentum is increasing.

So, the technicals are supportive of a higher price. Moreover, the level of short positioning adds weight to this argument.

However, the fundamentals are way below Blackberry’s current valuation.

Again, does it matter? Probably not.