“We rate BLACKBERRY LTD (BBRY) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company’s weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.” –TheStreet.com
Why BBRY Stock is Gaining Today
Really TheStreet.com? A sell after the stock has already been bombed out for the reasons you cite? Really? What were you saying about it at $140 or even $70 a share? Was it a sell then? Seriously, I don’t know and don’t have the time or inclination to look. But I’d have my doubts TSC that you were calling ‘sell’ back then.
NFTRH+ had a completely different view the other day. Of course, it was a technical view, not a fundamental one. BBRY is a turnaround play with John Chen at the helm. Indeed, now we find out that they are segregating the future from the past as the re-branding of this device dinosaur moves ahead.
Needless to say, today’s activity is thus far on the plan we laid out by daily and weekly charts in that + update (not linked because it is password protected). Here’s the daily chart from that update, although the weekly is even more interesting in its message.
I used this morning’s bump to cover the DSLV short (i.e. silver 3x long) position at a shade below break even (-.5%). The reason being that it is in a series of lower lows and lower highs. I think that silver is going to be a buy soon, but unless it paints a green circle above 19.70 the potential is there for lower prices first. I don’t want to be leveraged in that case. I’ll just stick with a few normal and relative quality mining positions for now. Here’s the current silver price from BullionVault (you can pull this and the gold chart live any time using the link above).
A snapshot of current daily technicals…
It’s probably getting about time to take the profit on this one. It’s only 4.5% but it’s my largest single stock position. As noted previously, I have a few fundamental longs, a chart long (bull flag) on a Semi stock and Mr. Bounce Long, Google. It’s always fun when people perceived as bearish like me do their buying amidst bull pukage and it works out.
GOOGL is probably going to boink the lower wedge line, but I may think about profit taking soon. In this racket you never know. When I covered the shorts on EWP, SPY and sold FAZ, I thought I might be leaving something on the table from the short side. Well, no not really. It was a good time to dump the shorts. Now I have the same thing going on with Google here, in reverse. Got to love the markets.  Though a look at the weekly chart and a comparison to the QQQ makes me think twice… dohhh! Be decisive Gary! Well, it’s a free site and thus I am not paid for decisiveness here.
Funny thing about the market; I’ve had this potential 17,500 target on the Dow since early in the year as it formed a bullish Ascending Triangle on this weekly chart we review often in NFTRH. Then the recent mini correction dropped it hard and I felt a little twinge of embarrassment about this chart. Now? Not so much.
This is what happens when market bounces extend off of corrections that came about amidst b/s like the Middle East and Russia/Ukraine tension (i.e. things that have nothing to do with the US stock market other than resetting over bullish sentiment to a healthier state). These bounce backs tend to fix technicals. The market can turn and drop tomorrow, but as of 3:00 on Tuesday, the Dow’s weekly technicals (if you discount MACD) are intact and targeting 17,500.
Okay, here’s the last one of these short-term casino patron updates. I’ve got more important things to keep track of like that short against DSLV, which is testing its limits this morning. SPX 60 minute view…
- Initial objective (targeted back when the average bull was supposedly worrying about Ukraine and Russia) of 1950-1960 (resistance, now tentative support) is in the books.
- Gap is filled.
- Pattern measurement still resides above.
- Typical of these rallies off of bull market corrections, they tend to test to the will of bears so that even those with the most conviction that this is finally the big one, will have a good amount of doubt, Soros Put position or not.
- I have no such conviction, and instead resolve to go with what the market says.
 It may be better (assuming miners go bullish) to pick up the cream of the cream (though royalty’s relative valuations are a question now) and start one’s own mini SGDM. I did that today adding GOLD to already existing EGO, BTG and GG. SGDM does not trade much volume and I don’t like the bid/ask spread.
I give SeekingAlpha a lot of grief, and rightly so. Over the years, since I was one of the first people they invited to write over there it has become a denizen of stock pickers, perma bulls/bears (depending on the trend, which is now a mature bullish one) and promoters. They usually refuse TA-based content in favor of stock picks (although a few TA’s somehow sneak in, like the perma bear on gold and his Elliott Waves; must be a more lenient editor). But I digress. I basically post there when I have something that is not TA, have the time or feel like it, which is not often lately.
But there is good research there as well. Case in point was Ashsraaf A., a technology writer who first put me on to the case for Intel. Sadly, he seems to have disappeared into thin air. There are other good writers as well. Ben-Kramer Miller is someone I follow simply because he unearths continuous information about gold mining, whether in reviewing earnings or discussing the sector. I don’t know enough of him to get a feel for the overall quality of his work, but his articles have been helpful to me to a degree.
Reference this article, which made me aware of a new alternative (to GDX) for gold miner investment, the Sprott Gold Miners ETF, SGDM. The fund actually discriminates rather than oafishly following an index. The areas in which it discriminates are debt, costs, growth… in other words, it seeks to cull out or minimize the crappy situations, of which there are plenty in the gold mining industry.
Here is the information page for SGDM (including Fact Sheet) at Sprott along with its holdings…
Click to enlarge
BBRY is a turnaround play, pure and simple. John Chen is at the helm and has a tough job ahead of him in re-branding this company from device maker to ‘internet of things’ software developer.
There is a little anecdotal macro work here in the form of the machine tool sales data, but #304 went on to get very deep in the macro, finding some negatives and some positives before finally settling into normal management of precious metals, stocks, commodities, etc.
Bullish Headlines (8.16.14)
“Stocks Falter as Heat Rises in Ukraine-Russia Conflict” MarketWatch
“Russia-Ukraine Tensions Escalate” MarketWatch
“S&P 500: What Does Soros Know That We Don’t” MarketWatch [ref. massive put position]
“Ukraine Tensions Flare as Poroshenko Touts Strike on APCs” Bloomberg
“EU Warns Putin of More Sanctions as Ukraine Crisis Grows” Bloomberg
Hype everywhere and not a fundamental reason for a stock decline to be found. On Friday I went out for a short while with the market strong and came back to a downward reversal. ‘Hmmm…’ thought I, ‘maybe the 1960 level would act as firm resistance to the S&P 500 after all’. Then I caught the gist of the negativity per the above headlines, let it settle for a while and decided that the market probably has higher to go.
Economy: Machine Tool Sales & Manufacturing
The bull depends on corporate profits generated in an okay general economic environment nurtured by a 5.5 year helping of ZIRP policy (with periodic side orders of QE and bond market manipulations like Op/Twist). On Friday I talked with a contact from my old perch in manufacturing, and the information he provided was indicative of a potential future slowdown in manufacturing. My contact is a machine tool dealer specializing in used equipment and his input is that with the machine tool market slowed to a crawl… “guys are not spending; they are just waiting to see how the next election is shaping up”. He also notes that shops are still very busy, but they are not committing to add capital equipment.
Well what do you know? Guess who’s trying to break the resistance zone, get to the gap and possibly even the pattern measurement? Why, none other than the SPX, fueled by easing Russia-Ukraine tensions according to this headline (try not to get startled when the picture jumps out at you).  They wisely dropped said picture down to the middle of the article.
We had the US dollar in a bullish pattern back in July and wouldn’t you know a sharp rise came in concert with a stock market drop. The US market, like others in the developed world keys off of policy making and its ability or willingness to [pick one... mute, compromise, repress, devalue...] the currency. So the sharp rise in July did not go down well with asset markets.
As the stock market bounces it is not surprising that Uncle Buck has consolidated above the pattern neckline. MACD and RSI look suspect and if USD rolls over the stock market could continue to benefit. A strong visual support area is noted at the moving averages.