RIMM's ...Big Bet!

Posted on by The INO.com Team

"Research In Motion Ltd. (RIMM) will spend up to $1.2 billion to buy back about 21 million of its shares, or 3.6% of its total shares outstanding. The buyback will start Nov. 9 and last for up to one year."

That was the headline news today on Research in Motion symbol RIMM so I decided to look at the chart to see what was going on in the "real world". When I got to the chart, one thing immediately jumped out at me and that was the negative action that this market has shown in the past several weeks. Looking at this market a little closer I was able to see that our "Trade Triangle" technology was 100% negative and that our monthly "Trade Triangle" indicator had turned negative on October 28th at $63.38. This is a major negative in my mind for this market.

In this short video I show you exactly what we expect to see for RIMM in the future. I also share with you some downside targets that we are looking at which may surprise you.

You may have watched my earlier videos on RIMM versus Apple. If you missed it, you can watch that video here.

As always our videos are free to watch and there is no need to register. I hope you enjoy the video and comment about it on our blog.

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

13 thoughts on “RIMM's ...Big Bet!”

  1. I feel, you need to add more technical parameters like CCI, ADX and parabolic SARs to your market club tool. It's not working as you have presented in the video. I bought Dec 65 calls below $3 and that's going higher. RIMM will again see $80+ before Dec 1st.

  2. Corporations are still in cost cutting mode and with the iPhone gaining ground and new Windows phones coming they are looking to shed costs and RIMM is a big cost, they charge for licenses and the iPhone and Windows phones connect to corporate exchange servers for free. My organization was able to cut over 1000 Blackberries and their costs with a switch to a mix of iPhones and BlackJacks saving lots of money. Yes you make make money now while businesses maintain those licenses short term but as Microsoft exchange 2007 & 2010 become more widespread why pay for a service when it's free and RIMM loses out and the profits on hardware as we all know is minimal

  3. I stated in my previous commet that since November 2, RIMM has outperformed its competitors. Currently, it is up 14.5% for the month while the NASDAQ is up 4.7%. I think that RIMM will hit 70.00 before it starts to drop.

    If you want to try options, buy a Dec 60 call currently @ 6.75. If RIMM hits 70.00, you will make about 48%. Right now RIMM has far greater upside potential than downside.

  4. I noted previously that since November 2, RIMM has outperformed its competetors. Currently RIMM in up 13.8% for the month vs the NASDAQ up 4.7%. I think RIMM has an upside of about $70.00, and then may slowly drop. I suggest buying a Dec 60 call currently @ 6.75. If RIMM hits 70.00 you would make 48%.

  7. HI Adam, are you suggesting buying puts on rimm? What timeframe are you seeing - end of Nov or into Dec? I am learning options and would like to paper trade this.

    1. Catherine,

      No, I'm not suggesting buying puts on RIMM. I am not an options expert nor do I claim to be one.

      I do believe however that RIMM is headed lower.

      Hope this helps.

      Adam

      1. RIMM has traded up strongly since your "RIMM Buyback" article. I think you said we might see resistance around $65 and then a downside to about $45. That's a big dip! We're at %63.50 now and the stock continues to be strong even in weak markets. It's been downgraded and price target lowered....but the stock continues to soar. The PE is still relatively low. Any change of thoughts on this one?

  8. Adam I hope you're right about RIMM. Sold my small position this morning but the stock was up on the day on a flat market. I'll be watching to see how this trades in the next few days. Would like to think that your technical methodology works....but most of the 'gurus" that I have followed so far bat about .500. Hope you can do better!

  9. Adam, your video makes a convincing argument not to go long on RIMM, but I tend to agree with Dan de Man, that it would be too risky to short.

    Although trading at a 7-month low, RIMM went up 4.3% this week (as of 11/6/09, 10:00 am PT. By comparison, PALM up 3.3%; AAPL up 2.7%, NOK up 3%; and MOT down .5%. I had expected that RIMM would do better when it announced that it would buy back shares valued at $1.2 billion, But it did outperform its competetors during this week's bull rally

  10. With all due respect, this is not that safe of a short. RIMM has already lost 50% of its value. All the easy money has been made and we're a little late to the party. The target is 25% away BUT stock buy backs are generally bullish.

    Since we're bullish on oil, why don't we go long on oil and short some airline stocks?

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