RIMM – Breaks Above EBV-2, Major Buy Signal!
April 27, 2012
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We wrote this on April 10, 2012.
Not much. Certainly RIMM is in the doghouse with Wall Street and every other stakeholder it seems. The best thing for the company is to get out of the financial headlines and let the new CEO go about building a management team and delivering great products in the future.
We believe the stock will drift between EBV-3 ($12.07) and EBV-2 ($14.05). We see no reason, with the present fact set, for RIMM to trade below EBV-3. However, if a significant, and pronounced breakdown of EBV-3 sometime between now and the launch of BB10 we would use that level $12.07 as a sell signal.
On the positive side, if RIMM breaks above EBV-2 ($14.05), this would be a significant buy signal and evidence that RIMM maybe on the right track long-term.
On April 26, 2012, RIM transited above EBV-2 or $14.05. Here is the chart.
RIMM with weekly price bars, EBV Lines (colored lines) and model price (dashed line)
For those interested, a daily updated chart of RIMM subsequent to this post will be maintained on Facebook, here.
For those wondering about EBV lines we just finished a major blog on what these are, here.
Will be interesting to see what happens.