On Tuesday, Research In Motion’s (RIMM’s) stock plunged over 4% on notable volume. It appeared that a 4-month downtrend was ready to resume. That evening, RIMM announced a mysterious event, presumably with AT&T, for the following Tuesday. Always quick to buy a rumor, the market responded to the hype by sending RIMM to a rapid recovery of all Tuesday’s losses.
On Friday, RIMM made an important technical breakthrough. On higher than average volume, it broke above its 50-day moving average (DMA) for the first time since late April while at the same time bursting above the downtrend in place since April. Moreover, RIMM has finally recovered all its post-earnings losses suffered after disappointing investors and traders in late June.
It is natural to expect a “buy the rumor, sell the news” setup. However, given RIMM has another aggressive stock repurchase program in place, I am more inclined to think the momentum will last longer than many traders may expect. I initially missed the importance of Tuesday’s announcement and the unfolding positive technical developments, but I will be alert going forward for new entry points for going long (notwithstanding negative technical developments with the major indicies or with major tech stocks like Intel [INTC].)”
The charts below summarize the recent technical developments. Note well how RIMM finally bounced off support from April, 2009 (I clearly was focused on the wrong gap when I was watching for RIMM to fill the gap down from September, 2009!).
*All charts created using TeleChart: 
Be careful out there!
Full disclosure: no positions