RIMM Longer Term Trade Idea

If you are looking for a longer term trade idea on the long side, then RIMM may be of interest to you.

Last year we followed RIMM pretty closely with a long trade and some short trades, but now it's showing a significant change in character that looks a lot like a stage 1 base. I would probably not jump in to a position all at once, but maybe get my toes wet and look for the tactical opportunities to add while keeping a wide initial stop as a stage 1 base, like a stage 3 top, can be quite volatile.

 We went long RIMM at the white box, it lost ground from there, but the 3C signals stayed positive so we held, eventually we exited the trade at a profit of I believe somewhere around 10+%. We also have had numerous short trades in RIMM, but the ROC recently is showing a change in character and changes in character precede changes in trends.

 As I had just mentioned a day or so ago when talking about "W", double bottoms and tops, the long standing technical dogma that says the second bottom is shallower has not been the market behavior over the last several years (probably close to 10 years really). Here we se an initial support level broken two subsequent times, each deeper than the last. We'll see the underlying trade at each of these breaks as well and you'll understand why this happens.

 First a large change in character on the very important 60 min chart from in line with the downtrend to a leading positive divergence as the downtrend loses momentum.

Here are the breaks to new lows that Technical Analysis says shouldn't happen, but with each new low, more and more stops are hit, creating volume/supply on the cheap which becomes easy to accumulate in larger chunks without calling attention to the stock while it is under accumulation and driving prices up before they are done putting together their position; this is why we see these head fake moves and note that each move below support isn't large, just enough to trigger the stops and create supply.

In any case, I'm not seeing a GREAT tactical timing set up, but strategically, RIMM looks to be one of the few longer term long positions that is worthy of consideration.