Don't Bust My Berries
His disclaimer:
Are You Not Entertained?
A Canaccord Adams analyst raised his price target on RIMM to $190 from $180. When it pulled back last week , he told clients to buy on the weakness (the bait). RIMM then popped Thursday on the Brightpoint agreement and the announcement of integration with SAP AG enterprise applications (the hook). Retail buyers jumped en masse sending RIMM up Friday as well. Gold stars to the analyst. Now over last weekend, he states to expect some volatility since RIM not only has a large following among retail investors, but also to hedge fund shorts.His disclaimer:
“What we heard in the last two weeks [was that] some hedge funds had put on meaningful short positions against RIM and long Apple (AAPL), and I think that caused a lot of the volatility.” (the release)
The dichotomy of this statement is that it is TRUE. The promotion being made here is that the retail bids will outweigh the hedge fund action. They won’t (the catch). Canaccord has a history of making oppositional calls so the retail public will take the other side of the bet. Now hedge funds will force RIMM down beyond longs' pain threshold before RIM’s annual capital markets day [CMD] meeting. Smart money will pick RIMM up on the dirty cheap later this week because May 11 is an eternity for this stock from a traders perspective. So investors who jumped in on the pullback last week will feel the pinch of this trap and/or get an opportunity to get in lower. Share price will rise during the CMD meeting as it historically does, so they will get a boost up from that, but now only from a high entry point (the throwback). And that will provide many good opps for funds to take investors on a ride. This is truly why analysts exist: oppositional promotion.
Technical Analysis of NDX
(click image for TA details)
A potential hammer reversal pattern on the NDX Friday at key resistance levels. Crudely referred to as a "gap and crap". So anything below the closing print of 1981 or a gap down today will validate the cycle pivot from Friday. For those of you who doubt TA, funny how the Yahoo deal gets washed out as the broader index has provided a technical setup for a drop in the DOW Monday. Why is that important? Because 75% of stocks move in tandem with the market averages. And 50% of an individual stock's movement is related to its sector. Sure it can buck the trend, but the line of least resistance right now is DOWN. Especially in tech...
Trade Signal: Sell
Disclosure
Short RIMM
Quote of the Day
"Markets are never wrong. Opinions often are."
"Markets are never wrong. Opinions often are."
Video of the Day
How Cash Does RIM
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14 comments:
I assume that you are notbacking off of any of your anticipated catalysts that would dramatically "take down" the stock price and that this has been more a function of the timing that market influencers are following. As I understand this post -- the set up for a take down is now in place by Canaccord/others?
Volume stays relatively low - - still expect a dramatic "take down" in the next few days or do you foresee an elongation of your timeframe expectation? Looking forward to your taking a victory lap on that message board. Amazing how these folks really think that comments there actually move the market and they are obligated to obnoxiously fight for their POV. Interesting that the last dramatic downward move in Nov corresponded with an earnings announcement from Cisco
Seeking,
Yes I do.
Not backing off, this is a build up on low vol and these funds have been preparing short for days.
Divergence will always be accounted for. Patience is key with RIM. That's not just my book talking, either. I too am amazed at how frequently folks think they can influence anything on an obscure message board. The sum total shares of any given board are equal to maybe a glass of water from a swimming pool.
Your CSCO comment is an provoking referendum and your thought process is lucid. I DO like to win, in all parts of my life and the board is my most valuable sentiment indicator, that is all. The most profitable trades are the most painful right before they profit.
We will all be rewarded for patience as this build up in RIMM is finished.
Intestinal fortitude is an interesting trait to draw on. Do you still expect an ultimate reversal to lows from last fall/winter before OE? Excluding the technical analysis, the crazies on the board that talk about low numbers for the PPS don't appear to be that far off based on cash flows and probable/realistic growth rates.
Final piece if Cannacord really did raise its estimate based on a 2010 earnings estimate -- deja vu all over again: In November after Cisco disappointed (and they did earlier this week if one was looking for a sign that recession was over/not coming) Canaccord raised its outlook the day before start of the three day plunge from 130's to the 100's. If you go back to the message board there was more than one person that covered their shorts the afternoon prior to a 10 point drop.
Question is whether the take down will happen before next Friday's expiration?
Seeking,
That's an interesting confluence of fundamental events. If history does not always repeat, it most definitely rhymes. Cannacord has always proven the oppositional trade and all this portends that we now have a lock in on the break. The technicals are also backing that the break is imminent as we are closing the gap and cementing the reverse in polarity, also much like DEC.
We are close...
My long term target on RIM is still 85-90 and still believe we see that by end of this month. As far as OE, 110-115 seems to be on the table.
These takedowns are timed in concert with a downward market as the trigger and are propped up until then, much like today. Friday would be ideal with AIG news and the XLF having finally violated the upward channel we have been in for weeks.
Challenging short, but all the good ones are.
Cash
Wow -- they confirm that their new phone won't meet the May intro. AT&T says the call quality isn't there yet the stock soars. Go firure. Waiting to see anything that refutes your premise of Thursday. Message Board long are in wild self congratulation -- hope they book profits at some point. From a "smarties" view point -- what changed?
Still qualify as a challenging short? Better question -- if you still had gun powder in hand would you short more after today? (hypothetical question -- not a request for investment advice)
After doing my own analysis I am convinced that the increasing number of announcements of new phones are a function of true panic and the last gasp of an attempt to maintain share price for a little while longer. While the May puts will be of now value I am getting more enthused every day about the upside for the 100 June put contracts that I have been accumulating -- still of the view that we will be at or below 100 by month's end?
This is such a manipulated stock at a manipulated time (op/ex).
The price action wanted to break 136 but the cheats pushed it up. Takes thick skin to stay with this one, but we know that RIMM takes the elevator down. I covered my USO short and will take June puts on any pop as this bull wave needs to deplete all bears and then shock to the down side. Note that we are way oversold and the calls are 3 to 1. It would be a perfect opp for them to wipe out calls tomorrow since they demoralized put holders today.
May 40 calls off the charts today.
This is an irrational market that is not running on fundamentals, reality must set in soon.
Stupidly took my filter off on the message board and got to see the lower forms of life -- won't ever make that mistake again.
MacDailynews has a link to an interview with the RIM CEO that states that they have been working on their iphone clone for 3 years -- how in the world did any market maker/manipulator decide to run this one up if that is who runs the thing???
seeking,
If you want good TA vids they can be found at www.tickerforum.org
Donation is $150/yr but does advanced TA twice daily that is on the bear side. I signed up last week and the guy is good.
Only thing that disappoints that you are being "outed" on the message board as an alias for a looney long is that it was one of the perma shorts that did it. Any chance that you are going to move the dialog here permanently?
Still expect Goldman to shortly "take down" this helium balloon? THis week?
Seek,
I no longer follow Yahoo as it is more of distraction than anything else. The RIMM board seems like a peanut gallery where nothing constructive goes on. I will have a board added here shortly when I get back.
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