Many traders and investors have been buzzing about the Research in Motion(RIMM) earnings. Every financial website was making a big fuss about how they knocked the ball off the cover and may trade higher to the moon. As a trader we simply view all of that as noise and want to tune out the news that you hear. It is more important to just find the support/resistance levels on the charts.
This morning we alerted our traders that RIMM should pullback from the open. After scanning the smaller timeframes we navigated to the daily chart and noticed a very strong lower gap window at 71.42 going back to September 25th, 2009. By simply identifying this resistance area it told us that the odds favored a pullback from that level. Gap higher moves usually retreat into strong resistance and this was text book play.
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