BlackBerry’s Stock Comes Down From Double Up, Looking For Support Level

Having recently rallied to new 52 week highs of $6.24 on Tuesday, BlackBerry's stock (NYSE: BB) has more than doubled in a little over three months, marking a remarkable sentiment shift. The reversal came off the back of an earnings beat, and has held firm. Zooming out a little, and the stock had come down more than 80% in 3 years, with a shift in focus clearly required.

With a 10% pull back in BB's stock price taking place over the past two sessions, you have to look back a few years to look for clues of support from previous resistance. The $5.50 to $5.60 level as you can see on the 5 year weekly chart below has proven to be a key level numerous times, and with the stock now sitting at $5.58, there will be plenty of watchers paying attention to these levels and whether they can hold.

The company’s strategic focus on auto software and security solutions is now seemingly positioning it for potential growth. BlackBerry recently sold its Cylance business, allowing it to concentrate its efforts on its primary segments, QNX software and Secure Communications.

This strategic sale is aimed at optimising the company’s focus and resources towards its most promising areas. The decision to divest Cylance highlights BlackBerry’s intentions to strengthen its core offerings and capitalize on the growing markets of its main segments.

The company's QNX software is a notable success, now embedded in 255 million vehicles globally. This includes connected and autonomous cars, showcasing BlackBerry's strong presence in the automotive software market. This extensive integration of QNX in vehicles demonstrates the trust placed in BlackBerry’s software solutions by leading automakers and positions the company to leverage new growth opportunities in the automotive sector.

Looking ahead, BlackBerry might introduce subscription fees for services like security upgrades in vehicles to boost revenue. This potential move could provide a sustained income stream and reflect the company’s innovative approach to monetizing its software enhancements in the auto industry.

BlackBerry's focus on QNX and security solutions, following its strategic divestment from the Cylance business, is driving the company towards promising avenues for growth, as evidenced by its recent stock performance. Whilst analysts price targets have not caught pace with the stock's run, if the current range can begin to act as support, and the next earnings print can impress the markets, things could be looking up.