RIMM has break its support at $42.72 and is now poised to head towards the lows in 2008 (around $35).
This is a fairly strong support as it was the lows of 2008 (during the financial crisis). It was tested twice and with it a ‘W’ pattern was formed and it rebounced off the levels.
So, what has changed since then?
1. RIMM is now lagging behind in the smartphone market; playing catchup to Apple’s iPhone (or iOS) and Google’s Android.
2. New competitors includes Nokia (with its partnership with MSFT) and HPQ with its webOS (formerly Palm).
3. Matured and slowing growth for its BlackBerry server.
I expect $35 to be supported first. Whether it will continue to hold will depend on its execution for its Playbook and other new smartphone devices based on the new platform (QNX).
Unfortunately, market demand is not with RIMM on the above. Apple’s iPhone commands a huge following, has a great established ‘App Store’ and the newly iCloud service will continue to lock in users and create demand from the younger generation as well (through music, videos and other digital consumption).