Thought a chart would be a nice change of pace. This is a stock that we are currently short. The company reported disappointing earnings last week. The general story for the bears is that even though Research in Motion and its competitors are in an expanding market, RIMM's products are capturing a smaller percentage of that increasing 'pie' and losing market share to the likes of Google's Android and the ever-popular Iphone. Their tablet product has been underwhelming and the chart has "negative outlook" stamped all over it. The stock gapped down below its exponential 20, 50 and 200 day moving averages in response to the earnings report and management's comments. Technically, it broke two very well-defined upward trend lines, the most recent dating back to late October 2010 and a longer upward trend line that began in mid-August 2010. Most recently, during the last week there has been continued downward pressure on the stock down to the $56 mark where it has found near-term support. Below $55 there is a large gap to fill and the next level of support is at $50. We are shorting this stock in anticipation of it making that move to $50, thus capturing a $6 to $8/share profit on the position.
All for now.
Labels: charts, commentary, fundamental analysis, nasdaq, technical analysis