Tze 9:00 AM
Labor day weekend is just ahead. Volume is getting light. Instead of a full blown update, we just want to discuss briefly RIMM (Research in Motion), a stock that has had a huge come back since hitting a 5-year low this month.
We can attribute some of the 50% rally to short covering. Problem is fundamentally, RIMM’s valuation has not really changed i.e. not significant enough for analysts to revise up their price and earnings target estimates in a meaningful way. The recent rally was achieved under light volume. Both RSI and MACD are making a comeback from their previous severely oversold state. There might be more room for this rally but it’s just not convincing at this point.
SPX is not really making any significant movement neither. RSI bounced perfectly off the low of 30 and the index has been rallying under light volume. We do not feel any bullish sentiment at the moment.
Looks like 1250 on the S&P and 12000 on the DOW should be the reasonable cap for this current counter trend rally, which would take us into the month of September. Then October would be another horrible month for the stock market.
No word yet from the contributors.
Ok thanks. It’s getting close to the holiday. Not a big deal. Traffic is surprisingly strong
Good morning traders. Lost power for a couple of days thanks to Irene. I’m keeping a sharp eye on RIMM as well. Besides short covering some traders are thinking it may be a buy out candidate. Not me. The question is where is a good spot to short it. I would love for it to reach gap support(35ish), but not sure it can get there.
Hi Brownie. Yea I think the loss of power is preventing all of us from communicating with each other. Yea RIMM’s spectacular counter trend rally was unexpected.
This chart suggest RIMM is touching the top of the channel. Could be a good spot to short with a stop just above the channel.
I agree. I think this trade would be very low risk.
Good place to sell RIMM as it nears support. Nice little day trade for over 4%.
I’m trying to be a more disciplined trader. Financials are under performing today(no surprise here) so I tried to buy FAS $15 Puts at .98 for a quick scalp. Got down to $1.00 before it reversed. So I make nothing on the play, but glad to see I had the right idea. It is now approaching it again, but I cancelled that order. Not as confident that 15.46 holds this time. Perhaps it goes higher and I can find a better spot to short.
For the leveraged ETFs, just follow the methodology I outlined in the Excel file.
You mean like EMC and RIMM last week? Okay, I’m game. You pick out one from quintile 1 and one from quintile 5.
Yea I think I will start doing that starting tomorrow.
NFLX is getting quite a hair cut in afterhours,
Haha this stock sure took a big beating after reaching that ridiculous $300 mark. Whenever NFLX reaches $30 again, that is when the market probably bottoms.