by Serge Berger | January 7, 2014 8:00 am
Troubled smartphone maker BlackBerry (BBRY) has gone under some drastic changes after firing CEO Thorsten Heins and giving the reins to John Chen, and now BBRY stock is under the watchful eyes of a new executive lineup.
On Monday, it was announced that John Chen added Ron Louks to the staff, as the new president of devices and emerging solutions. Louks previously had the roles of chief strategy officer at HTC and chief technology officer of Sony Ericsson. More recently, Louks was the CEO of OpenNMS Group, an open-source network management and application platform for global telecom and enterprise networks.
After Blackberry (unsuccessfully) tried to sell itself in recent months, BBRY is making a next round of changes that appear to include a move back to its roots, with an increased focus on producing smartphones with keyboards. Furthermore, Chen already announced a multiyear deal with Foxconn Technology Group for outsourcing the manufacturing and design of some phones. The agreement with Foxconn allows Blackberry to offload more of the costs of its struggling and unprofitable manufacturing operations, and get them more in line with competitors such as Apple (AAPL).
On Monday, BBRY stock jumped more than 5% on the news, and it continues to look good on the charts.
The demise of BBRY stock has been well covered by the financial media; however, most of it has come in the form of backward-looking analysis with very little in the way of actionable trading calls.
While BlackBerry shares still have more recovering to do through a multiyear lens, the double bottom that BBRY formed with lows in September 2012, and marginally lower lows in December 2013, now looks to serve as a good base against which to trade from the long side. Given the magnitude of BlackBerry’s falter in recent years, I began by drawing just a couple of simple reference resistance lines, connecting high points on the BBRY stock chart.
A first more meaningful resistance point through this time frame comes into play near $9.80, followed by $12.50. These are high-level resistance areas, but ones that could offer interesting upside target areas for opportunistic traders.
On the daily chart, BBRY stock on Dec. 20 broke above a multimonth downtrend, then settled into a couple weeks of consolidation, and yesterday rallied again, bumping into the 100-day simple moving average (blue line).
From here, barring too much resistance from the 100-day SMA, BBRY stock looks to have plenty of room higher, and a next upside target is around the $8.50 area.
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Learn more about the strategies Serge Berger uses to create profits in the market every day. Download his trading plan in the Essence of Swing Trading e-book by clicking here. As of this writing, he did not hold a position in any of the aforementioned securities.
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