Click on the chart to see a larger image!
With the Fed results being widely expected I think RIMM was really the show for the day. The chart we are left looking at on a daily basis is a disaster. It has just failed a cup and handle breakout with a massive bearish reversal on big volume. Look out below! I expect RIMM to test its uptrend line and probably 200 day on this trip lower.
More important for the market was the nature of the reversal. A story broke in the morning that an appellate court had remanded part of a lower courts decision back to the lower court but gave no more details than that. On this highly ambiguous news traders ramped the stock 10% to a new all time high. Then the stock was halted. Next the details of the court decision came out and the important portions of the lower court ruling were intact. Then the stock remained closed a couple more hours and opened on a 8 point intraday gap below its open. It is hard to view this reaction as healthy, particularly occuring on a Fed day.
This type of action was not restricted to RIMM as GE had a similar - though far smaller - run up and fall back on the release of slides prior to today's annual presentation. GE is not normally the vehicle of choice for hot trading but people were eager to get involved first and ask questions later.
I really preferred yesterdays grind higher to these whippy moves.
No comments:
Post a Comment