BlackBerry Ltd (NASDAQ:BBRY) hit a new 6-month low yesterday but managed to end the session with a gain of 1.48%. The volume at 18 million against the average volume of 12 million was significant because the bounce in the price came from exactly the lower boundary of the range established since July 2014. With the volume staying higher than the average for the last 4 sessions, the bulls may have a stronger hand to push the price higher once again and keep the range intact.
The last result reported by BlackBerry Ltd (NASDAQ:BBRY) on 27th March wasn’t interesting to the market that much as the revenue kept declining with a loss of 32% on a y-o-y basis, against a 34% decline on a q-o-q basis. On the positive side, the operational expenditure rationalization undertaken by the company resulted into an operating profit of $2 million. The software sales saw a boost in the form of an increased figure of $67 million against the earlier $56 million but reaching the target figure of $600 million may be very difficult for the company, UBS believes.
The optimists believe that the cost cutting strategy and the cash flow generation capabilities will benefit the company to a great extent in the coming quarters. Technically, the bullish view can’t be discarded right out of hand.
The stock has been in a huge bear market for a long time now and almost all the gains made in the last decade have been eroded but the year of 2014 saw a gradual rise, with a continually shrinking volume, suggesting a total lack of distribution. The recent bad results have not managed to push the price to fresh lows and that bearish exhaustion may signal the birth of an inherent strength. It may be too early to mark this as a turnaround stock right now but investors may keep it under watch.