Research In Motion (RIMM)

Company

"Research In Motion is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, SMS messaging, Internet and intranet-based applications. RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services with wireless connectivity. RIMís portfolio of award-winning products, services and embedded technologies are used by thousands of organizations around the world and include the BlackBerry™ wireless platform, the RIM Wireless Handheld™ product line, software development tools, radio-modems and software/hardware licensing agreements." (company website)

RIMM 6-month chart
RIMM 6-month chart

Buy

RIMM 2-month chart RIMM 1-year chart

Research in Motion had a dramatic run-up in price in the last half of 2006 and has since built a base for the past four or five months. The 50-day moving average, flat for a while, has begun moving up again. The earnings report, due Wed, is expected to be very strong, indeed.

  • Price momentum (PPO) — trending up for past two months
  • Trend (ADX) — strengthening, albeit below the threshhold, and buying pressure (+DI) is rising sharply
  • Relative strength (RSI) — picking up sharply in recent weeks
  • Volume — falling in 2007, but still very heavily traded (nearly 7M shares/day)

Based on technical analysis, MarketEdge calls RIMM "overbought" in a "weak downtrend trend," and they recommend closing short positions. At the same time, they point out that it "broke DOUBLE TOP (Bullish) Point & Figure Chart Formation." All this makes no sense at all to me.

Sell

gain Bottom line
6%

During most of the month that I held RIMM, it was an unrealized loss. Just days after I bought, the stock plunged, reaching as low as $28.80, an unrealized loss of 12%. I've watched with fascination — and horror — as it bounced around by several dollars a day. Yikes! I'm too old for this! I am, after all, sixty-four!

bird in the hand

Thus, when RIMM shot up more than $22 this week, bringing my stake nicely back in the black, I took the opportunity to make a deposit in the bank, clearing a modest profit in percentage terms, but a respectable $425 in real money. The chart is unambiguously strong, at the moment, but this is definitely a good time to apply the bird-in-the-hand principle.