Blackberry shares are pulling up to an area of interest visible on the 4-hour chart of the stock. Price is in correction mode at the moment but it looks like technical indicators are suggesting a potential continuation of the downtrend.
The share price previously broke below support around the $10/share level then dipped to $8.50/share earlier this month. From there, Blackberry shares retraced to the 50% Fibonacci level, which lines up with the broken support.
Blackberry Shares Forecast
Resistance at $10/share seems to be holding for now, as stochastic is moving down from the overbought zone and hinting at a pickup in selling pressure. If that’s the case, Blackberry shares could fall back to the previous lows or even create new ones if selling pressure is strong enough.
In addition, the current area of interest lines up with the longer-term exponential moving average on the 4-hour chart. The short-term EMA is treading below the long-term EMA, confirming that the selloff is likely to resume.
If price breaks above the current area of interest though, price could be in for more gains, possibly until the next resistance at $11/share. Risk appetite could be a strong market catalyst for this move, especially if economic data from the US shows signs of improvement and confirms that the ongoing recovery is set to carry on.
For now though, the path of least resistance is to the downside, as risk aversion is still present in the financial markets. However, news that the company will continue to make new acquisitions in order to meet its sales targets is keeping the price of Blackberry shares afloat, which might be enough to trigger an upside break at some point. The Wall Street Journal reported that BlackBerry is paying $70 million for WatchDox. Last September BlackBerry paid $32.5 million for Movirtu, another mobile software company, and $82 million for German firm Secusmart GmbH, a mobile encryption firm.
To contact the reporter of the story: Jonathan Millet at firstname.lastname@example.org