Last week was a big week for Research In Motion according to our model price work. Even with a holiday-shortened week in the US, RIMM was able to break up through EBV-3 in both US and Canada. Here is our model price chart calculated as of Friday night November 23, 2012.
Research In Motion 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.
I have written extensively on this company throughout the year and I will help readers with an index and links of the blogs I have written.
Chronology of my blogs on Research in Motion
February 10, 2012 Research In Motion (RIMM) Target this Price on the Downside
March 14, 2012 RIMM – Target this Price on the Downside (Update 1)
May 15, 2012 RIMM – Broke EBV-3, Is the Big Whoosh Coming?
July 4, 2012 Four things that caught my eye while I was enjoying some R&R
July 25, 2012 Invest in Research In Motion (RIMM) with less Risk than Prem Watsa!
September 28, 2012 Research In Motion – Still in No Man’s Land
In my May 15, 2012 blog, I warned investors that RIMM had a negative transit or broke EBV-3 suggesting lower stock prices for RIMM in the coming months. I have reproduced our model price chart at the time below.
Research In Motion (US) with weekly price bars, EBV Lines (colored lines) and model price (dashed line)
Since this negative transit on May 15, RIMM has spent many months in the wilderness. New senior management was hired. Asset write-offs occurred both in goodwill and inventory. A product delay announcement of the new BB10 telephone certainly indicated the worst and marked a low for the company’ reputation in the eyes of the public. RIMM’s stock price hit a low of $6.22 US – almost a 50% decline since the negative transit of EBV-3 on May 15.
(Readers will note this is all typical corporate action stuff and stock price movement for stocks that transit down through EBV-3. That’s why investors of any equity with a negative transit of EBV-3 should be on alert for bad corporate news and possible losses.)
Better Times Ahead?
With a positive transit of EBV-3, according to our model price work things are looking up for Research In Motion for the first time in a very long while. (See blog – Questions and Answers about “Coming out of the Blue!”) I can’t recommend outright purchase of securities on this blog site, however I am very excited about RIMM transiting up through EBV-3. Short-term there are still some possible bumps in the road for RIMM. RIMM reports their 3rd quarter results in the middle of December and all eyes will be focused on their long awaited product launch of BB10 on January 30, 2013. As usual any negative transit of EBV-3 by RIMM should be viewed as a sell signal by investors and traders alike.