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Technology Stocks : BB: BlackBerry (fka RIMM: Research in Motion)
BB 13.28-0.2%Jan 22 5:05 PM ESTNews

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From: Sultan12/20/2017 3:14:18 AM
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CALL VOLUME EXPLODES AHEAD OF BLACKBERRY EARNINGS

Another positive earnings reaction could spark a short squeeze

BlackBerry Ltd (NYSE:BB) will report earnings tomorrow morning, and ahead of the big event, BB stock is trading down 0.5% at $10.89. The stock gapped more than 13% higher following the company's last earnings report in late September -- when it was still trading under the ticker " BBRY" on the Nasdaq -- and options traders are betting on more of the same this time around.

At last check, 51,458 calls and 5,055 puts had traded on BB -- nearly six times what's typically seen at this point in the day. The January 2018 11-strike call is most active with 22,151 contracts traded. Trade-Alert indicates new positions are being purchased here, though some of the activity could be tied to stock.

A little further down the list, speculators appear to be buying to open the weekly 12/22 12-strike calls. If this is the case, they expect BB to break out above $12 by options expiration at this Friday's close. Based on the stock's current perch, another post-earnings move like last quarter's would put the shares near $12.31 -- territory not charted since January 2015.

Looking closer at the charts, BB has had a standout year -- up 57.9% so far, and pacing toward its best annual return since 2009. And while the stock pulled back sharply from June through August, a strong bounce off its rising 160-day trendline helped send BlackBerry to a two-year high of $11.78 in mid-October. A more recent rally off its 80-day moving average has the equity once again eyeing multi-year highs.

A round of short-covering could certainly supply the fuel for an extended surge, too. There are currently 46.75 million BB shares sold short, representing 18.4 times the stock's average daily pace of trading.

schaeffersresearch.com
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