Friday, July 11, 2008

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

The first chart is RIMM's daily time frame. I've been watching it since the gap down on weak earnings. The consolidation on declining volume at support of 200 DMA was starting to look like a bearish pennant. Keep this one on the WL for next week. Potential continuation if RIMM doesn't regain its 200 DMA on Monday.

Intraday RIMM formed a bearish flag after breaching its recent daily consolidation lows. This set up a perfect storm. It's easier to see the declining volume on the flag formation on the 3 min. chart below. Short on BO. You'll feel the volume as price breaks out of the pennant and that acts as confirmation that the setup is real.

My target was the round $ number $110.00 and I covered as price approached my target. You also feel the capitulation volume when it's done.

The afternoon was basically a chop fest, but a late day failed bull flag pole led to a bearish flag formation and a low risk scalp back down to the morning swing low.

10 comments:

QQQBall said...

nice trade. RIMM took out the b-point with volume on the daily

Jamie said...

Yeah, very bearish looking.

anarco said...

Nice!
It seems like it was "bear-flag day" today. I also had a good day with PBR. I am starting to understand how this work. Thank you Jamie!

Jamie said...

Thanks Anarco,

Yeah, great job with PBR! I love flags because they are relatively easy to spot and the price/volume contraction/expansion is very intuitive for planning entries.

Christian said...

Nice trade.

On another subject

I noticed in your blogroll that you are refering to Harvey Walsh. I have been following his site, but i came across this site http://fuocointerno.wordpress.com/
and it looks like it is a scam (cannot be 100% sure, but there is some good evidence). Wantet to let you know because I think your blog is great and I don't want you to potentially be refering to scammers.

Sincerely,

Christian

tee2green said...

Just wondering what "....capitulation volume" feels like? Should I be out of breath and slumped over in my chair? That body position normally is how I look after listening to Van Halen's Eruption. Perhaps I should play that tune the next time I feel a stock capitulating?

Just a little Saturday morning humor, Jamie. Hope you and yours are doing well.

PS: Brett Favre wants to be released so he can play with another team? We cheeseheads (I personally don't own one, thank you very much!) are in turmoil.

tee2green said...

Just looked at the 1-minute chart of RIMM and saw a very prominent Head and Shoulders pattern that looked like it would have caught half of the downward move after your entry.

Jamie said...

Christian,

The creepy part is when I try to find TheTradeShow.TV, the so called Walsh/Doyle connection, it links back to Market Club which is a sponsor here.

The Harvey Walsh videos are just teasers to try to sell his trading kit. Still they're fun to watch.

Jamie said...

tee2green,

You see a H&S top and I see inverted C&H pattern BO at $114. Either way, the pattern was a big winner!

Christian said...

Jamie,

I think Harvey's videoes are fun to watch too, but a scammer is a scammer. I think Doyle removed thetradeshow.tv because of the connection. Doyle also has a character James Steem who sells a tarot kit.

It is a litte bit sad because I liked Harvey Walsh. He was a funny character :)

Sincerely,

Christian