Monday, November 17, 2008

Fib. retracement - Research In Motion Limited (USA) (Public, NASDAQ:RIMM)

RIMM was the strongest stock on my watch list. After it broke its trendline, I was looking for a 38% retracement of the day's range to set up a potential long entry but, RIMM just kept drifting higher. Finally it started pulling back gently and gave me the 38% retracement I was looking for. I waited for it to break the new trendline to go long. My prelim. target was 38% and my secondary target was 50% - 62% fib. extension of the day's trading range. As you can see from the chart the 38% level was achieved, but price formed the head of a H&S top just shy of the 50% ext.. Once the H&S top broke the shoulder line, RIMM set up a quick short into the close.

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