RIMM

There is a question in the comment section on RIMM :

With RIMM (RIMM), now that we have got a blue XTL & price is trading above the .618 retracement level (using the June high to July low) is the previous short trade idea negated?

First, I am not worried about the XTL blue bars.  I am not trading RIMM based on the XTL breakout or breakdown.  I am trading it based on the stochastic. 

RIMM still meets the rules of the stochastic trade.  It pulled back to .618 but there is not a full line outside of the .618.  For the market to pull back too much, there needs to be a full line outside of .618.  With RIMM we do not have that. Therefore, this is a valid stochastic sell and the stop is just above the high on 8-11 at $135.

Joel Stahl

Comments

[RIMM]

I am new to Advanced GET, but I try to trade on RIMM based on the stochastic condition, but I could not figure out the exaactly the entry point, please help if any one can.

[Pete]

I have learned the hard way at times that using technical analysis many times does not work when some announcement comes out on a stock. It could be earnings or in Research in Motions case a New phone. While, tomorrow (Thursday 8/21) we may see a pullback, I believe once their phone comes out this stock will fill the gap made in June.

[tfelter]

I have a newbie question, I'm looking for a type 1 short on RIMM. The question: The price has risen above the wave 4 channels. Does this negate looking for a short? The price has risen beyond 61.8% also so I'm guessing that the stochastic trade is out. Is there a short trade in there somewhere? Or should I go somewhere else to look?

[anthony]

Earnings annoucements do move stocks by + or - X%. In fact stocks with options have got a IV (implied volatility) earnings skew priced in so by looking at the ITM options you will get an idea by how much (+ or -) a stock will move. Best to stay away from trading stocks during earnings.