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One of the more difficult aspects about trading based on fundamentals is trying to discern at what point your thesis has been accurately reflected in the price of a given security. In other words, while you were correct to have conviction, at a certain point you have to wonder whether it is already baked in the cake. In the case of Research in Motion, while they are far from destitute, the firm has been the quintessential tech laggard over the past two years. To borrow a phrase from property lawyers, the fact that they are getting their heads handed to them by AAPL and other competitors is “open and notorious” to just about anyone paying attention.
As you can see on the weekly timeframe below, the price action remains messy with those crisscrossing longer-term moving averages supporting the amorphous chart. With that said, the stock has seen six consecutive weekly red candles, nearing the apex of what looks to be a falling wedge pattern. Again, you have to wonder at what point the thesis that RIMM is no longer on the cutting edge of smartphones is adequately priced in–At least on an intermediate-term timeframe (weeks, months, etc).
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Looking at the daily chart below, the notion of RIMM nearing a tradeable bottom becomes even more acute. To be sure, we can see a clear downtrend that began on a daily timeframe in the middle of February. However, since that late March earnings drop, note the falling wedge plus the combination of the hammer and inverted hammer candlesticks late last week. When seen after a prior steep downtrend, this usually leads to a high probability long setup with a clear stop-loss defined below the low of the hammer, that being $52.66.
So trading this would be done on the same basis as the recent trade in AMR? Indications of a possible O/S bounce coming soon… ?
Stronger than AMR, in my opinion.
technically you may be right
but fundamentally this stock is garbage based solely on their playbook product
have you seen that piece of shit? srsly
stop hating–go see my last post
Working in the telcom industry i look out for whats trending and whats failing. My point of view is that BlackBerries have quite a loyal following amongst business types (not surprising) and even more amongst the youth in London (surprising?). Taking the train for the last 6 months all you can hear are BBM (BlackBerry messenger) notifications going off. BBM is a big pull and customer retention factor. Big amongst certain groups also…specifically the Hip Hop crowd.
They are also big in South Africa amongst the youth. They want blackberries. They like iphones…but Blackberries have the same status.
Now this might not mean much but about 6 months ago they bought a stockholm based company (TAT) that specializes in GUI interfaces. TAT do some pretty incredible work though i hope a big corp buying them wont kill this.
Dunno…just thoughts.
I dont own the stock nor have i ever owned the product.
I still love my crackberry.
How do you have a playbook already?
Ha
the best RIM could do was put out an appless tablet that is future-ready with QNX finest. I bet you the QNX team will not be getting much sleep for the next…2 years or so. In addition, each daily update on the flashbook has been getting better, as the poor programmers work 20 hour days to get things ready by April 19. I believe brilliance+ money+ coffee/stimulants can do some nice things by tuesday. I’m not really a value guy unless the stock i like has good valuation, which is to say I’m worthless .But with a P/E at 8 or below, high earnings and enterprise/revenue 1.29 (high good revenue growth) and an entrenched market for entities who require top secrecy, I’d say value investors should be forced on principle alone. Talking my book here, but we just need one or two news items regarding the playbook, or a delay of the Indian demands (likely in my opinion), and the squeeze is on. Also, this thing hit 4 0,0s on my Stochastic RSI. based on past performance, a Green weekly candle is quite likely Fire away. nice post chess.
Is a double hammer (regular/inverted) a good pattern? Certainly seems a serious bottom is in place. I have to sharpen up when I get back from vacation. Thanks Chess.
If it wasn’t a good pattern I wouldn’t write a post about it.
6 red weeks in a row. Last time it did that was Oct 2010 and then it rallied 50%
Nice.
Since we’re not talking about buying and holding forever, our thoughts about the long term viability of the company are largely irrelevant. Since last summer my thoughts about RIMM where: (a) long term goes out of business, (b) plenty of trading opportunities between now and then.
I guess the question then becomes do we try to anticipate the move up and get into the stock with a short stop loss, or wait until the buyers present themselves, have a little more confidence, but a longer stop.
Since @Nic mentioned August, looking at that time period, if history repeats itself, we’ll have plenty of opportunities to get into the stock.
Personally, I don’t believe that @Chess and the PPTers are the only one watching the stock and thinking the same – so I would not be surprised to, once some strength flows into the buyers, see a gap up. If that gap continues up, I’ll be tempted to join the party.
Another technical comment – we are now at the exact 61.8 fib retracement, going from the Aug low to the Feb highs. Might be a logical place for some support…
The more people hate it the more I want to buy it to be honest, so hate on people …
The Barrons feature article this weekend is about RIMM
Is Rimm the next Palms? I think the new drug of choice is Apple crack and Android speed. I myself is an new Apple Crack addict. LOL