Is BlackBerry Stock Oversold?
With shares of Blackberry (NASDAQ:BBRY) trading around $8, is BBRY an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.
T = Trends for a Stock’s Movement
BlackBerry is a designer, manufacturer, and marketer of wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software, and services, it provides platforms and solutions for seamless access to information such as email, voice, instant messaging, SMS, Internet, intranet-based applications, and browsing. Its products and services feature the BlackBerry wireless solution, the Research In Motion Wireless Handheld product line, the BlackBerry PlayBook tablet, software development tools, and other software and hardware.
BlackBerry’s latest desperate move involves taking out newspaper ads in an attempt to soothe investors and the few people who still use the company’s devices that everything will be all right, Bloomberg reports. The full-page ads, which have been appearing in newspapers around the world, are in the form of an open letter. “These are no doubt challenging times for us and we don’t underestimate the situation or ignore the challenges. We are making the difficult changes necessary to strengthen BlackBerry,” BlackBerry says in the ads, which are meant to communicate with customers directly.
T = Technicals on the Stock Chart Are Weak
Blackberry stock has been struggling over the past several years. The stock is currently trading near lows for the year as it continues to digest negative news. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Blackberry is trading below its key averages, which signals neutral to bearish price action in the near term.