There is one stock in particular that caught my attention last week after displaying impressive strength following a ‘weak’ earnings report.    Then yesterday it rallied aggressively and posted a highly significant chart pattern breakout.  The stock is Canada’s favorite fallen angel, Blackberry (BBRY):

BBRY_Monthly

The monthly chart shows how far BBRY shares fell after the company began to lose chunks of market share to Apple in the smart phone market.  However, to me the most interesting aspect of this chart is the base that has been forming during the past 3 years.

The weekly chart begins to paint an even more intriguing picture:

BBRY_Weekly_12.23.2014

The weekly chart really stands out due to the series of higher lows it has put in place during 2014, the contracting range, and the growing relative strength.  This all adds up to a large ascending triangle which has formed over the past 15 months with an RSI-14 (14 period relative strength index) approaching the sweet spot breakout level of 60.  A weekly close over $12 would target $16+.

As a technician it is always important for me to look at longer time frame charts first, and only after getting my ‘bearings’ do I zoom into the daily and even hourly charts.  The daily chart of BBRY shows that a powerful breakout from a steep falling wedge occurred yesterday:

BBRY_Daily_12.23.2014

This falling wedge breakout offers a measured move target of $12.50+.  Integrating the daily and weekly chart patterns paints a very promising picture of a stock that could rally 50% or more in a relatively short period of time (1-3 months).  Moreover the 32% short interest in BBRY shares could add rocket fuel to an already bullish technical picture.