Shares of Nokia Corporation (ADR) (NYSE:NOK) have been showing a nice uptrend over the past few weeks amidst the buzz generated by the imminent release of its new Lumia phones and an alliance with America’s largest carrier Verizon.
After slumping to 15-year low of $1.63 on Jul 18, 2012, the stock started to show value buying and rose to $2.93 over the next three weeks. However, the stock faced resistance at $3 area and profit taking pulled the stock lower to $2.50 in the next three trading sessions.
Well, that proved to be a temporary correction as the shares of the company have broken past their resistance levels and in yesterday’s session the stock jumped as much as 11% to close at $3.20, its highest in the past three months.
The stock has rebounded almost 96% from its recent lows and jumped over 15% in the past one week. Technically, the stock is trading above its 50-Day Moving Average of $2.26. The stock may face resistance at $3.54, which is its 200-Day Moving Average.
On the Chart Analysis
A. The stock has shown a “V-Shaped Recovery” with the key resistance of $3 broken.
B. NOK has created Higher Tops and Lower Bottoms.
C. The recent rally was driven by heavy volumes with 107 million shares being traded in Thursday’s session.
The recent rally was driven by rumor that the company is all set to launch its highly expected new smartphone which would be available on Verizon Communications Inc.(NYSE:VZ). Nokia has scheduled an event on Sep 5 (just ahead of expected launch of its new iPhone By Apple).
Microsoft Corporation (NASDAQ:MSFT) will also be present at the event as the company’s Windows 8 operating system will support Nokia’s new phone.
What is critical is the inclusion of Verizon, because Nokia will have the support of the top 4 U.S. carriers, offering Lumia handsets. From the Verizon point of view, the deal makes sense as it will lower its dependence on Apple’s iPhone and Android-based phones.
However, it is a bit premature to talk about Nokia’s success as the company is still recovering from one of its worst slumps in the past one year due to immense competition from Apple and Samsung. But, it could be a good opportunity to see a turnaround in Nokia’s business.
What do you think? Will Nokia be able to come back after losing its market popularity? Feel free to Share your thoughts.