Options Wonderland

[dalcindo]

Re: RIMM - Top Heavy; Expecting Decline

Hi, 6979 - I agree. I very much like your charts when compared to mine, especially compared to the trendlines I drew several months ago.

My 2-cents per weekly chart:
1 - 14-RSI decelerated; failed to reach > 65 at a point where price reached a significant resistance (dotter red line from down-trend channel)
2 - Secondary indicators are taut to the "overbought" side to line up in a pre-decline pattern (i.e.: 3 or more secondary indicators in overbought range, then start plateauing or signaling decline)
3 - Price validates downtrendline

... And extra cents on monthly chart:
1 - 14-RSI tapers off barely above 50-line
2 - A/D line flattens and forms a lower low.

Finally, on a more esoteric basis, drawing your Fib grid (blue in chart) and overlapping it with a second Fib grid (red in chart) starting at approx. 78.00 (where price gapped open in late SEP 2008 and retested this past week), highlights some significant price levels. First of all, the red Fib indicates that price retraced at 100% to approx. 78.00, which also corresponds to a significant resistance level (green dotted line at a level validated in July-high 2007, Jan-low 2008, Oct-open gap 2008, and recently May-high 2009.

Overall, there are significant technical events at the current level indicating a likely reversal. The market would need to generate a significant amount of energy to re-new some momentum and overcome these strong technical hurdles.

At these levels, the charts favor reversal - IMHO:

RIMM - 36-Mo., Weekly Chart:



RIMM - 60-Mo., Monthly:



RIMM - 24-Mo., Daily Fib Matrix:


D.