Stock Trading Predictions & Technical Analysis: GRMN, RIMM

Tuesday, September 29, 2009

GRMN, RIMM - Awaiting Buying Opportunnities

The market has been relatively quiet lately, and there doesn't seem to be too many opportunities on both the upside or downside. However, I currently have 3 stocks on my radar who may give us BUY or SELL signals soon:

GRMN - WAIT

GRMN is currently in a strong uptrend and just below some key resistance below $38.00. The moment GRMN closes strongly over $38.00 ($38.25-$38.50), this would be a BUY signal, and I'm currently looking to go long GRMN if that happens. The stochastic has already given us a BUY signal today, which may be an indication of what's to come, possibly as soon as tomorrow. Some people may argue that seeing GRMN bouncing up over its support trendline around $35.00 is already a BUY signal, but I would rather wait to see GRMN go over $38.00 to play it safer.

RIMM - WAIT

DAILY CHART

RIMM has been battered last week, and according to the stochastic it's oversold, and I agree. I think the market overreacted by selling off heavily RIMM, and I think could possibly very soon see a bounce back up The stochastic is now standing at a strong support level below 20, and so is the RSI at 30. Finally RIMM seems to have bottomed at around $66.00, and this may be confirmed as soon as tomorrow if we have a long up gap. We currently have the possibility of seeing a Three Inside Up formation, which indicates a bottom. This would require RIMM to have a white-bodied candlestick closing well within range of the last red candlestick, while hitting a higher low than the previous two days. If this occurs tomorrow, it will be a confirmation that RIMM has bottomed. The three inside up formation is said to be the best tested patterns, according to Schwager's research tests. It is ranked among the top performing patterns formation in terms of net profits achieved after going long, has some of the least drawdowns, and is first in percentage of winning trades. It would be best to see RIMM go over and possibly close higher than its last long down gap, which occurred on Friday. Although, it would be preferable to go long RIMM after it goes over its closest resistance level at $72.00, you may consider to start entering part of your position when you have the three inside up formation confirmation, and then add more to it once it goes over $72.00. This is probably what I will be looking to do tomorrow if we get a confirmation, going along with my latest trading strategy Y-SWING 2.0. Please note that if RIMM closes down tomorrow, the three inside up formation will no longer be valid.

WEEKLY CHART

Looking at the weekly chart, we can see that RIMM has been trading in a rather wide range for approximately the last 6 month between $65.00-$90.00. Despite this trend, the range is so wide that seeing RIMM bounce back at its current strong support level at $65.00 still gives us a lot of upside potential even if RIMM continues to move along this trend. Buying RIMM at its potential bottom at $65.00, to see it go as high as $90.00, gives us a potential return of +38.50% if it stays within this trend, and a higher return if it breaks above this trend, over $90.00. Another factor giving strong support for RIMM, is the fact that its standing strong above its weekly 200 day MA at around $65.00. RIMM looks to be at the verge of giving us a BUY signal as soon as tomorrow. A break below $65.00, could send RIMM back to $60.00, and below $60.00 RIMM could fall much lower. But I really don't see RIMM go below $60.00.

2 comments:

UnknownSeptember 30, 2009 at 11:08 AM
Hi Yoel. I have been following your analysis for a couple of weeks now and I find it very interesting. I was wondering if you ever had any experience with pharm. companies and what your thoughts were of NVAX in particular. Thanks.
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YoelSeptember 30, 2009 at 7:03 PM
I'm not specialized in any company in particular, but I can read the charts of any stock and give you my analysis. Looking at NVAX chart we got an evening star formation when it topped around $7.50, and since then have been in a bearish trend. NVAX also crossed down its 50 day MA just over a week ago, which is another bearish signal. NVAX is currently building support around $3.75 and has resistance at $4.50. Seeing NVAX remain above $3.75 would be the first step to reversing its trend. The second step would be for NVAX to close strongly over $4.50, which would give you a minor BUY signal. But I would preferably wait until NVAX has a few consecutive up days and goes back over its 50 day MA which currently stands at $5.00. NVAX is currently a WAIT. A fall below $3.75, would be another SELL signal.
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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.