Since its low at 48, RIMM has make a bounced and try to break through the gap down resistance at around $56 (identified by Chikou Span; see circle 1)
3 attempts and it seems that RIMM is ready to turn down; with the Tenkan sen failing to touch the Kijun sen.
A failed counter rally.
A close below $54 over the next few days will be a good indication that the counter rally has failed and RIMM is ready to continue on its way down. First target price is around $52 followed by $48.
A break below $48 will be extremely rewarding.
Let’s examine what are the possible catalyst for that?
1. Delay in new product launch
2. Huge success on its competitor front eg Google’s Android and Apple’s iPhone4
3. Poor response to new products especially from the Corporate market.
Looking forward on the chart, we can also see the huge kumo resistance hanging there with no indication that the trend has changed. In other words, the bigger picture for RIMM is still down.
RIMM, like other company (eg. Garmin) with great products is facing major competition in its core business. At this moment, there is no indication that they have raised the bar for their products and services.
However, we do need to be careful of possible M&A activities for RIMM as the company is generating very healthy revenue and has a pretty good grip on the telco market.