We're seeing the exact same setup in shares of another phone maker, BlackBerry (BBRY).
Like Nokia, Blackberry is consolidating sideways in a rectangle pattern, just in the shorter-term. For BBRY, the key levels to watch are resistance at $11 and support at $9. Here again, when shares break outside of that range, the high-probability trade is to bet in the direction of the breakout.Why is that the case? It all comes down to buyers and sellers. Patterns like the rectangles in BBRY and NOK or the ascending triangle in TEL are a good quick way to identify what's going on in the price action, but they're not the reason a stock is tradable. Instead, the "why" comes down to basic supply and demand. The $11 resistance level, for instance, is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have previously been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above $8 so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.
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