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BlackBerry Earnings Preview: Here's What the Chart Says

BlackBerry has come off its highs but is holding up over prior resistance. Here's how to trade the stock from here with earnings on deck.

BlackBerry  (BB) - Get Free Report may not be the top meme stock on Wall Street, but it’s a favorite among the WallStreetBets group.

With its low stock price and volatile trading range, BlackBerry has some fanfare with the short-squeeze crowd.

It may not have had a run like GameStop  (GME) - Get Free Report or be leading the way this time around like AMC Entertainment  (AMC) - Get Free Report, but that doesn’t mean it’s one to sleep on.

Of course, earnings are likely to be a catalyst for whether BlackBerry stock goes on another surge or continues to dip. BlackBerry will report earnings on Thursday after the close of trading.

The problem? The last four times BlackBerry has reported earnings hasn’t resulted in a bullish reaction. Maybe this time around it sets up the stock for a nice upside surprise.

If everyone is betting on or thinking a post-earnings dip is coming, perhaps BlackBerry will do the opposite. The recent pullback makes a rally easier too.

However, that doesn’t mean BlackBerry will rally. Let’s look at the chart.

Trading BlackBerry

Daily chart of BlackBerry stock.

Daily chart of BlackBerry stock.

Near the end of May, BlackBerry went on a surge, rallying right to resistance at $12.13. 

At the time, the meme stock trade was just picking up momentum again after taking a few months off. Further, many stocks were also coming off the lows following a brutal bear market in growth stocks.

With the rally, BlackBerry was looking good, even though it was initially rejected from the key $12.13 area. 

After that, I wrote:

“On the upside, let's see if the stock can break out over $12.13. In that scenario, perhaps the $14 to $15 zone would be in play. Above that and who knows, perhaps we could see a further squeeze into the $17 to $20 area.”

The stock topped at $20.17 and we’ve since seen a pretty large pullback. While BlackBerry stock has found its footing near $12.50 — nicely holding up above the $12.13 level — the 10-day moving average has continued to pressure it lower.

On a bullish post-earnings reaction, bulls obviously want to see BlackBerry stock reclaim the 10-day moving average and have that measure turn to support. Above that and the $14.75 level will be our first obstacle. That’s last week’s high. 

Above that and we’ll be looking at the $16.50 to $17 area, with the 61.8% retracement of the current range up at $17.17. If shares clear that mark, $20 is technically back in play.

On the downside, a move lower will thrust the $12.13 to $12.50 area into play. A break of this support zone puts the 10-week moving average on the table, followed by the 50-day moving average and $9.33 mark.