• Chart of the Day: Research In Motion (BBRY)

    by  • May 7, 2013 1:07 pm • Charts to Watch, Quick Hits, Tony Venosa's Chart of the Day • 0 Comments

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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)

    Recommendation:  Long

    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

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    About

    Tony Venosa, CMT is a Senior Options Strategist and works on the trading desk at Schaeffer’s Investment Research. He joined Schaeffer’s in 2010. He has worked in the finance industry for over 15 years. He began his career as a trading assistant in Chicago on the floor of the Chicago Mercantile Exchange. He later moved upstairs and worked as a commodities broker on both the retail and hedging side. He left the brokerage industry to begin his trading career as a proprietary equities trader at a Chicago firm. In 2000, Tony moved backed to his hometown and continued trading his personal account. He later went on to earn his Chartered Market Technician designation. He earned a B.S. in Finance from Miami University. Tony’s main focus is short-term directional option trading.

    http://www.schaeffersresearch.com/

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