BBRY

Originally Written: Sat, Jul 26, 2014 at 10:06 AM

Note that this is not a recommendation to buy or sell anything. Risk your money at your own peril.

Summary: BBRY is going up.

Early this month BBRY confirmed a new Bull Market. It had been falling steadily for quite a while before that. Then the Apple/IBM deal messed everything up, and knocked the price down something painful. Still, overall, it was just a typical secondary reaction. Now, this stock looks promising for a buy for a few reasons.

  1. The major trend is less than a year old. (young trends are more likely to continue than old trends)
  2. The price is near a strong support/resistance level. (such levels are where secondary trends usually start/end)
  3. We have an inside daily candle setup
A warning: It is possible that this secondary reaction could continue down to near $8.50, where another strong support level is. This would also make sense within the major trendline, as that price would be much closer to that strong uptrend.
What to do: There are a few ways you could handle this.
  1. I placed a buy stop order at 10.41, if the price reaches this level, I will buy. the point being that if the price breaks out of the upper boundary of the inside candle, we can be fairly certain that the new secondary uptrend has begun. If this order gets executed, I’ll put a stop below the bottom of the inside candle, at 10.09.
  2. You could just buy the shares. If you do that, I’d put a stop at either 10.09 or 9.69. If you do this, you’re basically gambling that the secondary uptrend is going to start right now, and you’re getting paid 10.41 – 10.27 = 0.14 (stop price minus current market price) to make the gamble. It’s not a very good gamble.
  3. You could just wait and see. Of course, this is basically the manual version of #1. if you do this, consider buying above 10.44 or 10.41.
  4. You could also short the stock if it falls below 10.09 or 9.69 (depending on how sure you want to be) in the hopes that it gets down to around 8.50 ish. This may seem counter to most of what I have said, but it’s really not, because even if the stock continues it’s secondary reaction down to $8.50, in the long term will rise through $11.50.
Conclusion: BBRY is in a new Bull market. It has been in a secondary reaction (down) which could continue down to $8.50 (less likely) or turn and rise past $11.50 (more likely). The best course of action is to let the upcoming price movement tell you which it will be. In the long term, it is headed up, we’re just not sure about the coming week or two.
Keep in mind, that entering a trade is only half the battle. Or even less. You need to also know how to exit. But I’m tired now, so we can discuss that later if you want.
BBRY 1y 07-25-2014
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