Tuesday, November 03, 2009

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

Last night we said that yesterday's downgrade resulted in a mini capitulation for RIMM. Today, the stock was bid up sharply on an oversold technical bounce.

I started scaling in as price crossed the base, and added to the position as price broke its consolidation zone after the first leg up. Set the stop just below the lowest point of the consolidation zone. Trending stocks will make higher highs and higher lows, so the stop placement allows you to stay in the trade as long as the trend continues.

On the daily we have a WRB with volume. I'm placing my fib retracment lines from the earnings gap to yesterday's low and looking for an ambush type bounce back up to the 50-62% level.


We talked about gold maintaining its bullish bias over the weekend. Today GLD broke above its trading range and most gold stocks participated. I'm staying away from AEM after recent weakness, but GG and ABX traded sharply higher.

4 comments:

Jim said...

Jamie,

Nice call last night in RIMM. Thanks for the confidence boost.

Jamie said...

Welcome Jim,

Good execution as usual!

PRD trader said...

sharp trading man.

Jamie said...

Thanks PRD