Garmin (GRMN) : Short Setup did not materialise

There are times when I am right and there time times when I am wrong.

Garmin is one of those. I was looking for a short entry it as it consolidates over the few days with a possible resistance level at around $28.50 to $29

My trade plan is to enter if it breaks the support as identified on the chart at around $28.

The saving grace for me is, the setup did not materialise.

Garmin was up yesterday on the open and went on to break resistance and surge higher.

If there’s a lesson for this trade that did not materialise, it will be :

No Setup. No Trade


Garmin (GRMN) : Chart Review

A follow up review on GRMN.

Garmin continues on its bearish move since my May’s post.

With the downward trend so strong, I won’t be surprised if GRMN will go below $15 soon.

Will the average user be buying a smartphone from Garmin? Or will they choose from Apple, Motorola, Samsung, Nokia, BlackBerry etc.

What will be the catalyst for it to rise?

Among the typical M&A, going private etc. In fact, I am thinking about possibility of RIMM acquiring GRMN.

This is really a stretch on my imagination here as I do not know whether RIMM has a comprehensive mapping services.

I do know that they have some geolocation services testing via this post

At the same time, if RIMM succeed with their own mapping services, it is also possible for them to kill GRMN’s core business through their deals with automotive.


Research in Motion (RIMM) : Resistance and Kumo

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.