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Today’s chart is of Research In Motion (BBRY) which designs, manufactures, and markets wireless solutions worldwide. It provides platforms and solutions, including email, voice, instant messaging, short message service, Internet and Intranet-based browsing, and multimedia content through developing integrated hardware, software, and services.
Ticker: Research In Motion (BBRY)
What I Am Looking At:
- Outperformance on a year-to-date basis, +25 percent
- 2013 price action has formed a giant symmetrical triangle
- A false breakout at the end of April has caused shares to re-enter the triangle formation
- As of today price has pulled back to the 40-day and 80-day moving averages (red and purple lines)
- Possible further downside action as shares could target the up trending blue line of the triangle
- Triangle upside breakout could see a move above the January high which coincides with triple the 52-week low and then a move to the significant round number $20 level
- Peak put open interest for the May/June series resides at the 13- and 14-strike prices which could add to the support of the triangle
- Short interest continues to rise since I last discussed BBRY at the beginning of April (+6%)
- High short interest (34 percent of the float) could be a tailwind for shares on potential short-covering
- 24 out of 30 analysts rate the shares a “hold” or worse, potential for future upgrades
Strategy: Three options on where to buy: 1) current level which corresponds to 40-day and 80-day moving average, or 2) rising trendline of the triangle formation, or 3) wait for another breakout from triangle