A near term technical target for RIM

That we are bulls of RIM is well known to our regular readers. Last week was the first time in 3 months that the stock closed towards its weekly highs and volume was punchy too as the chart below shows, trading just under 150m shares. In short, good price action.

We thought we’d look for a potential near term ‘pause’ point in the rise of RIM shares and it seems that just shy of $10 is a logical point. If we look closely at the weekly chart below we can see that pretty much every 4-6 weeks the stock price and the 17 week exponential moving average (ema) meet each other – principally through the stock rising to touch it. We are right at the 4 months point now and due another touch of this ema which is centred just at $9.84c (and falling around 6c per day).

The weekly chart also shows that the stock is far from overbought and that in fact the RSI is only just nosing back above the 30 parapet. This means there is much more to go on the upside to shake of the oversold status before any bulls should worry about exhaustion.

Any break above $10 over the next few weeks with a crossing of the 3 & 17 week ema’s and the RSI rising back towards 50 on the weekly chart would be extremely positive. We can see from the chart that RIM has not traded above its 17 week ema (and having a rising 17 week ema) for nearly 2 years now. If this occurs then we can (relatively) safely say that RIM’s new bull market has begun.

RIMM Weekly chart