Sentiment Analysis of RIMM
The Street reacted to RIM's 3g release delay by taking RIM down 6pts on Friday, only to have buyers come in later in the session to push it back to close 2 pts off the high. As with any manipulated stock, buying/selling pressure will come in to take it the other direction when this occurs. Consider the delay announcment the tremor before the earthquake for longs chasing the last 1/8. Upside is limited here folks, even for the traders. We are now at a a crucial point with RIM as I think we are at an inflection point and setting up for a big move down this week. This will be the beginning of a long term decline in RIM and P/E deflation (see April 5 blog). I am now officially short term (weeks) bearish as well as long term (months) bearish on RIM as the economic outlook is coming to roost. I also don't like the rumors I'm hearing on the Street about what is about to happen to RIM midweek, either. That being said, I see any future pops from here onward as opportunities for investors to enter and build short positions (common). Traders should be nimble and play the long side only as day trades (day) or options plays as even the intermediate is now bearish. Watch closely at Monday's open, because I think MM will initially push this higher a few points in the AM and this will be the opp I mentioned above for new short entries. A huge takedown will begin mid week so be prepared on the short side. I am tracking for entries to go short. It has been a profitable few weeks weaving through the long trades, but the time has come: RIM is a SELL, both short term and long term.
Technical Analysis of RIMM
Rimm sitting on 120 hard support just off the 20dma. Now normally I would think this is setting up for a classic rim spike after a down day and look for the the long daytrade at Mondays open. Not this time. I really don't know where the buyers came in from Friday! This volume divergence in RIM and the general market has been bothering me all last week. It seems that this market does NOT want to break the 50% FIB level on the Dow (12900) and spx1400 decisively. It portends that this market is being artificially propped and we are about to break hard very soon. After doing some DD this weekend, technicals point to the downside. RIM and the overall market is a sell and the early part of this week will be confirmation of that.
Trade Signal: Sell
Tracking for short entry near 124 at Monday open for short-term, intermediate-term, and long-term
Disclosure
Short RIMM
Quote of the Day
"Be greedy when others are fearful, and fearful when others are greedy" - Warren Buffett
"Be greedy when others are fearful, and fearful when others are greedy" - Warren Buffett
Video of the Day
Somebody Wins, Somebody Loses
Legal Disclaimer:
The content on this blog is provided without any warranty, express or implied. NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANICAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS AND OPTIONS. The author may have a position in any company or security mentioned herein.Actions you undertake as a consequence of any analysis OR opinion on this site are your sole responsibility.
6 comments:
Closest thing to watching the message board on a day of a pump up that I can imagine would be a discussion on a short bus when the special need kids are going home. I presume that the thesis holds in that this run up is being fueled by ...?
Agreed. They think only in terms of red and green and the smarties KNOW that, so they get easily baited by a classic bull trap. I don't blame them since they are not looking at accumulation/distribution or volume. Funds playing rotation pump games and suck longs in here.
GS/other funds are fueling this, it will all make sense by end of week. THIS IS IT, SEEKING. Takedown should start WED and continue to Monday.
Cash
You once mentioned an 80 to 85 target (albeit from a much lower price point) What matrix do you use to arrive at a target (sending me to a source in the financial library is fine)? My B school days either didn't cover -- or since I ended up in Product Management, I didn't pay attention.
Also, I am short WM (from before the GS reco) and while I am not too far out of the money overall --any chance this is another unpleasant surprise waiting in the weeds from the folks on Broad Street?
Congratulations Cash, I appreciate your posts and insights. You are to be commended. Do you have a target price on the downside we should be looking for? I look forward to your update this evening and through the day tomorrow.
Greg
Seeking truth,
I like that word "matrix" because that is what it is. Many are looking for the quick winner and don't see the DD that comes with it.
My trading plan factors several areas before I put a trade on: TA, FA, SA, and GA.
It is beyond the scope of one post.
If you are interested in my re-education, shoot me an email.
I own leap puts on RIMM as I have am long term bearish.
Short term, I trade around that for swing trades. Being in NY, I "hear" a lot also...
Cash
Dobledelux,
I am often hated on the board because I put profits above directional loyalty..and sleep. They don't understand variant psychology, which allows a trader to have a long term directional bias but still have opposing short term actions around that. Nothing is B/W on the Street. For me, there is no such thing as "long" or "short" with manipulated RIM, only "right". We did end a bear rally wave today and long term RIM will decline. Shoot me an email and I'll be glad to expand on that since I am far too often misquoted here.
Cash
Post a Comment