Is Blackberry (BBRY) starting an earnings run? Here’s the trade. (March 13, 2013)

by DAN BBRY 
I’m Dan Fitzpatrick at StockMarketMentor.com and OptionMarketMentor.com. Look I want to talk about BlackBerry ( $BBRY Research In Motion Ltd ) today. Here’s why. This is the weekly chart, now this company announces earnings two weeks from tomorrow. The way this stock is acting, look at the volume over the last week, it’s been higher than usual; 200-day moving average, it’s the 40-week moving average here, is acting as support for the stock. After the stock was in a squeeze here, right there, blew up above, came back to test higher, came back to test again, went higher, tested again, and now we finally really, really got established support at this level. Now, you look at the weekly chart and you get a better sense of what’s happening here. There’s our rising support line, here’s our down trending resistance line, and we’ve got a breakout. Now over the last three days of trading look at the volume, we’ve had an extreme amount of activity in this stock so it is under accumulation. How do I know it’s under accumulation? Because the price is going up and volume is high; sometimes it’s just not any more difficult than that. So what’s the next catalyst for the stock? The next catalyst for the stock is two weeks from now, earnings. So what I would suggest doing is strongly considering owning this stock. You can scale into it slowly, don’t just go buy a slug of it tomorrow, but this is definitely a stock worth owning. When I say you can scale into it, you know, you take a little here a little there, little there. I’m not talking about buying a little bit here and then waiting for the breakout up here. No, this is more of a fast trade. What I’m talking about is taking a little bit now and then once the stock gets up, say to $16.00 even, or something like that, then you’ve got a nice 35 cent profit, which doesn’t sound like much, but on a $15.65 stock, you know, that works. So you got a nice little profit, you take a little more at $16.00 and gradually scale into it so you can enjoy most of the run going into earnings. Do I think this is going to go up in a straight line? No, but I look at this chart and this is a pretty compelling case for this stock to at least come up and test this last high at over $18.00. I hope this trade idea works for you. Now members I want you to get over to the Strategy Session. I’ve got a couple IBD 50 stocks that I think we really got a look at, as well as several others that are working. Overall the whole market is still working and so I want to talk about it there.

Free Chart