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How High Can BlackBerry Go? The Chart Gives a Hint.

BlackBerry stock is jumping on its report, but the stock still has some obstacles to clear. Here are the levels we're watching.

BlackBerry  (BB) - Get BlackBerry Limited Report stock is ripping higher on Thursday after a better-than-expected report helped ignite the stock after-hours on Thursday.

While BlackBerry’s adjusted loss per share of 6 cents was lower than estimates looking for a loss of 10 cents a share, net losses widened year over. 

The same can be said for revenue. Sales declined year over year but still came in above analysts’ expectations.

Just as Ford  (F) - Get Ford Motor Company Report, General Motors  (GM) - Get General Motors Company (GM) Report and others are hurt by the chip shortage, BlackBerry is, too, as it does a lot of business in the auto sector.

On the plus side, management said they see the past quarter as “the low point.” Do the charts suggest the same thing?

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Trading BlackBerry Stock

Daily chart of BlackBerry stock.

Daily chart of BlackBerry stock. 

Ahead of the report, BlackBerry stock wasn’t looking all that good. Earlier in the month, the stock had failed to hold the 200-day moving average, and on Monday it gapped below the 50-week moving average.

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It stayed below the 50-week on Tuesday and Wednesday as well. The Waterloo, Ontario, cybersecurity-software producer's stock continued to hover in the key $9.50 area and just above uptrend support (blue line).

If everything else failed to hold, why would this area?

Without the report, perhaps it wouldn’t have. But that debate is for another time (and for another person). I care only about the chart, and right now BlackBerry’s post-earnings rally has done a lot to repair the technicals. 

With the rally, the shares are back above the 50-week moving average, as well as the 50-day and 200-day moving averages. Currently, it’s struggling with the 21-week moving average.

If BlackBerry can clear this moving average and take out the post-earnings high at $11.05, it puts $12 range resistance in play. 

Above that puts $13.60 on the table, which is roughly the 161.8% extension from the short-term range.

Above that and investors can start talking about the $15 to $16 area.

On the downside, bulls don’t really want to see this one lose the 50-day and 200-day moving averages. Below $10 and a gap-fill is possible.