Friday, December 19, 2008

Gapper - Research In Motion Limited (USA) (Public, NASDAQ:RIMM)

RIMM was an earnings gap on raised guidance. After breaking above the ORH, price stalled and eventually slipped under it, but quickly snapped back, setting a low risk entry long. It moved to the 38% Fib. extension of the previous day low to the ORH and consolidated again. It felt like a stair step extension, but eventually manged to reach the upper end of the R-zone.

AEM carved out a C&H. The trigger bar was NRIB. Place Fibs. from low of the cup to base of the handle. The target is a measured move of 100%. It was not reached but, I traded both RIMM and AEM in my retirement account as well as my trading account and the AEM TSX extended well beyond 100%. almost tagging the 1.38% level.

8 comments:

BUY ON THE DIP said...

Love that RIMM today. Very BOLD.

Cheers!

greytrader said...

On the RIMM trade, did you consider an entry at the break of the 9th (NRIB) bar ?

john said...

I bought RIMM off of the flag during the 10:40 bar (5 minute chart) ..got stopped out. If you were watching RIMM on those lower time frames, what didn't you like about that earlier entry?

Thanks.

Jack said...
This comment has been removed by a blog administrator.
Jamie said...

Jack,

Anal comments are not welcome here.

smtrader said...

I have the same question as greytrader. Enjoy your blog. Have a happy holidays.

Jamie said...

GT, John, SMTrader

Bars 4-10 are all inside the 3rd 15 min. bar. This sideways consolidation is the dead zone. Until price breaks out of the dead zone, no trade. When price breaches the dead zone and briefly dips below the whole $ number, I'm not interested in shorting because support of rising 20 ema is just below. Turns out to be a head fake and that's sets up the long entry because failures lead to fast moves in the opposite direction.

I've observed this type of price action quite frequently in gappers that stall shortly after taking out ORH. I've been caught before with a premature entry, they can go either way, so now I wait for a B&B on the upper base, a head fake at the lower base, or a reversal bar at the 20 EMA.

smtrader said...

Jamie:
Thank you for the explanation.