I'm actually quite upset with myself. We have made some really great trades in RIMM waiting to see what it wanted to become and while I was looking the other way at stocks I thought were more important to our overall analysis as well as individual ideas, RIMM went and grew up. I'm guessing this has something to do with the perceived if not real, dent in AAPL's impregnable armor. The IP5 I think really highlighted AAPL's transition from an innovator to a renovator. The smaller I-pad is another example of AAPL going after the competition (Kindle, etc) rather than leading the competition.
Nothing lasts forever, take a look at a 15 year or so chart of MSFT. Interestingly, like AAPL, once they declared a dividend it seemed to mark the end of the growth phase. So is RIMM going to present some potential competition? I really don't care, I just care about what the market sentiment is.
Here's a little longer look than I'd like, but I think RIMM has to be put in to perspective.
Look at the HUGE accumulation back in 2002-2003, this is when the new bull market started. This 1 day chart shows when RIMM started seeing distribution, not all out selling, but someone already made 2500% on a large position and they were starting to sell that in to demand, if you are on the institutional side, you don't want to watch a 2000-3000% gain evaporate as there's not enough demand left for you to get out of your large position without knocking the stock down 3% every day you try to sell a chunk, this is how the market works. By the 2007 top it looks pretty clear smart money was gone, probably short as 3C is leading negative.
If I HAD to guess where RIMM is 1 year from now, I'd guess it's lower, but the further out you try to forecast the less accurate your forecast is, I'm just trying to show you that RIMM had its day and give you some idea of where we are in the story.
Zoom in a bit tighter on the same chart, RIMM wasn't a beneficiary of the QE regime, most likely because AAPL dominated the space. However something recent has changed for the better. Remember after QE3 was announced I said that it seemed like a lot of the stocks that have already been marked up are looking ugly, while the stocks that look more like a bargain are looking better? RIMM is a great example of that, my guess is no one wants to be caught in a 20+P/E stock if the economy improves and the F_E_D cuts their QE buying as they recently disclosed in the last minutes, they are looking to transition from time based guidance to economic based which is FAR less certain and leaves a lot ope to interpretation, unlike "We will keep rates at ZIRP until August 18th of 2015".
A look at the recent price action this year looks like a CLASSIC rounding bottom, in price anyway.
And as we reach summer, AAPL and RIMM are close to mirror opposites, look at that daily leading positive divergence at new highs going back in to 2011! The yellow arrow is a little head fake move.
On a 60 min chart, here's that little head fake move, it's small, but volume responded.
The 60 min chart gives you some idea of where the positive divergence really took hold, right around the same area the daily chart shows, July.
The 30 min chart ends any disagreement.
On a 5 min chart we see some shorter term, smaller size accumulation and distribution, pay attention to the positive divergence around the 31st. Also note currently on the 5 min, there's no negative divergence at all.
On a 3 min chart, again the area running in to the 31st shows a pretty decent accumulation zone, again currently on a 3 min chart NO DISTRIBUTION/NEGATIVE DIVERGENCE.
Here's a closer look on the same 3 min chart, this makes it very easy to see how smart money operates, they sell in to strength and buy weakness, even though in this case I think they are only selling strength to buy at cheaper levels and in bigger size, to accumulate.
Only the 1 min chart, that shows a decent positive divergence in to the recent dip, has a negative divergence. This is a VERY small amount of selling, MAYBE enough to fill the gap (yellow) and if it did that, I'd take a good hard look at RIMM as a long position. I hate chasing, but even where RIMM is now, I'd be tempted to phase in and buy some here, add if we get a little pullback.
I do not think RIMM has anything to do with the market cycle we've been following, I think this is separate and probably has more upside, but a strong market certainly won't hurt RIMM's performance.
On the flip side, I don't see this as a new primary Bull trend for RIMM, but it could make quite a splash before it makes a turn to the downside.
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