Benzinga - BlackBerry, Ltd (NYSE: BB) was spiking up over 8% higher on Tuesday despite a lack of recent company news. The move higher comes in tandem with several other retail favorites surging up over recent trading days and amid the two-year anniversary of GameStop and AMC Entertainment’s historic short squeezes.
During that period, which lasted 11 trading days between Jan. 13, 2021 and Jan. 28 of that same year, GameStop skyrocketed 2,311%. Several other stocks, including BlackBerry, also rose to fame.
BlackBerry surged 275% between that time frame to reach a Jan. 28, 2021 high of $28.77, a price at which the stock hadn't traded since September, 2011. Since then, BlackBerry has seen a few subsequent smaller short squeezes, but overall, it has decreased steadily and reached a three-year-low of $3.17 on Dec. 28.
Although short squeezes are hard to predict, BlackBerry’s short interest is low, indicating the recent upward movement is an increase in buying. As of Dec. 30, 30.47 million shares of BlackBerry’s 580.35-million-share float were held short, meaning 5.81%, down from 35.83 million in November.
From a technical analysis standpoint, BlackBerry looks headed higher over the longer term, having confirmed an uptrend on Jan. 6 by printing a higher low at the $3.42 mark. Short-term pullbacks take place within any uptrend, however, and BlackBerry is likely to retrace lower over the next few days.
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The BlackBerry Chart: BlackBerry reversed into an uptrend on Jan. 3, after printing a triple bottom pattern just above the $3 mark. After the stock printed its higher low to negate the downtrend, BlackBerry printed new highs that confirm the new trend.
- On Tuesday, BlackBerry gapped up above a support and resistance area at $3.94 and started to surge higher. If the stock closes the trading day near its high-of-day price, BlackBerry will print a bullish kicker candlestick, which could indicate higher prices will come again on Wednesday.
- The next most likely scenario is the stock could form an inside bar pattern on Wednesday to consolidate the recent spike higher. If BlackBerry closes the trading day with a significant upper wick, it could indicate the higher high has occurred and BlackBerry will retrace.
- If BlackBerry continues to trend higher over the next few days, the stock may find resistance at a descending trendline, which has been holding the stock down since Aug. 22. If BlackBerry is able to bust up through the trendline, a longer-term bull cycle could be in the cards.
- BlackBerry has resistance above at $4.36 and $4.70 and support below at $3.94 and $3.46.
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