BlackBerry Ltd (NASDAQ:BBRY) was being considered one of the best turnaround stories in the market, but just a downgrade from Goldman Sachs may have dented the image to a great extent. According to the analysts of that broking house, the rise in the stock price in the recent months have been caused by not any fundamental improvement but cost cutting measures.
BlackBerry Ltd (NASDAQ:BBRY) has projected a revenue of $500 million this year but the analysts find it difficult to believe as the EMM solution doesn’t indicate any great interest in the market and even the services offered by the company may result in a revenue figure much lower than expected. Inability to compete firmly with the well entrenched competitors can be a huge obstacle. If the analysts are right, then the company can expect $426 million, much lower than the projection.
This deeply pessimistic mood is not supported technically, at least not that strong. A glance at the longer time frame chart of BlackBerry Ltd (NASDAQ:BBRY) shows that the bearish momentum has long been negated. The crash from the 2008 top finally culminated in a bottom in 2012 at $6.22, which was broken in end-2013 with a new low at $5.44 but the recovery from that bottom was quick.
In the last two years, the price has not moved much either way. A range is clearly visible with the volatility clearly undergoing a contraction. Most of the technicians would categorize this part as a base building in the long term and that should help the bulls to accumulate the stock at the lower levels.
The recent selloff has pushed the stock down to the medium term range boundary and the investors can use that to accumulate this stock slowly. The band of $8.50-$9.00 can bring a lot of buyers and that should be considered as a good buying area.