Research in Motion (RIMM) has made a strong move off the March low and was up 145% at one point. The question now: is RIMM a good buy at this point? For me, I would not buy a stock up 145% in a few months without a long consolidation and a strong base. But if one really wants to buy it, has RIMM made a sufficient base since the high in June?
Price has been below the June high for about 90 days and near the 50% retrace line which is the minimum time I would accept if looking to go long this stock.
From 2004-2006 the price of RIMM consolidated. The Gann fan of the range from the breakout in 2006 to the high in 2008 is represented below. Price moved back up to the 50/50 point but has weakened since that time. A move back to the 1×1 diagonal is not out of the question.
The weakest look is the fan of the 2008-2009 correction. Price has not made it back to the 50% retrace level which is bearish.
The swing chart is reasonably strong but a break above the June high needs to happen within the next few weeks or the chart above will move too close to the 100% time cycle which will essentially kill an upside move.
RIMM may be good for a trade for another 20%. Because it has moved over 100% already, it should be watched closely for any sign of weakness by those who do buy.
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