HOT TOPICS LIST
- MACD
- Fibonacci
- RSI
- Gann
- ADXR
- Stochastics
- Volume
- Triangles
- Futures
- Cycles
- Volatility
- ZIGZAG
- MESA
- Retracement
- Aroon
INDICATORS LIST
LIST OF TOPICS
PRINT THIS ARTICLE
by Arthur Hill
Research in Motion is meeting resistance from a big gap, and a recent MACD crossover signal points to lower prices.
Position: Sell
Arthur Hill
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
PRINT THIS ARTICLE
GAPS
RIMM Hits Resistance
08/26/08 09:06:47 AMby Arthur Hill
Research in Motion is meeting resistance from a big gap, and a recent MACD crossover signal points to lower prices.
Position: Sell
| Figure 1 shows Research in Motion (RIMM) over the last three months. The stock gapped down and declined sharply from mid-June to mid-July. After a doji and bullish engulfing in mid-July, the stock rallied back above 130 in August. Even though the stock has yet to break down, it is meeting resistance from the June gap and could form a lower high (below the June high). |
|
| FIGURE 1: RIMM, DAILY. The stock gapped down and declined sharply from mid-June to mid-July. |
| Graphic provided by: TeleChart2007. |
| |
| RIMM first met resistance in early August with a harami (black oval). This bearish candlestick pattern did not result in a reversal, but it did signal the start of a consolidation as RIMM traded flat the next two weeks. The stock established support at 124 twice in mid-August and a break below this level would be bearish. This would forge a lower high and signal a continuation of the June–July decline. |
| In addition to resistance, the moving average convergence/divergence (MACD) and the on-balance volume (OBV) are weakening. The MACD moved higher as the stock advanced from mid-July to mid-August. This momentum indicator rolled over in mid-August and moved below its signal line. Momentum is waning and this could foreshadow a support break. |
|
| FIGURE 2: RIMM, DAILY. OBV is the thin blue line on the price chart. |
| Graphic provided by: TeleChart2007. |
| |
| OBV is the thin blue line on the price chart in Figure 2. The indicator kept pace with the stock from mid-July to early August, but weakened in mid-August. While the stock managed to trade flat, OBV declined and selling pressure is picking up. It is also worth noting that upside volume was not impressive during the advance, and this often happens during a countertrend rally. |
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
| Title: | Editor |
| Company: | TDTrader.com |
| Address: | Willem Geetsstraat 17 |
| Mechelen, B2800 | |
| Phone # for sales: | 3215345465 |
| Website: | www.tdtrader.com |
| E-mail address: | arthurh@tdtrader.com |
Traders' Resource Links | |
| TDTrader.com has not added any product or service information to TRADERS' RESOURCE. | |
Click here for more information about our publications!
Comments
Date: 08/27/08Rank: 5Comment:
|
Request Information From Our Sponsors
- StockCharts.com, Inc.
- Candle Patterns
- Candlestick Charting Explained
- Intermarket Technical Analysis
- John Murphy on Chart Analysis
- John Murphy's Chart Pattern Recognition
- John Murphy's Market Message
- MurphyExplainsMarketAnalysis-Intermarket Analysis
- MurphyExplainsMarketAnalysis-Visual Analysis
- StockCharts.com
- Technical Analysis of the Financial Markets
- The Visual Investor
- VectorVest, Inc.
- Executive Premier Workshop
- One-Day Options Course
- OptionsPro
- Retirement Income Workshop
- Sure-Fire Trading Systems (VectorVest, Inc.)
- Trading as a Business Workshop
- VectorVest 7 EOD
- VectorVest 7 RealTime/IntraDay
- VectorVest AutoTester
- VectorVest Educational Services
- VectorVest OnLine
- VectorVest Options Analyzer
- VectorVest ProGraphics v6.0
- VectorVest ProTrader 7
- VectorVest RealTime Derby Tool
- VectorVest Simulator
- VectorVest Variator
- VectorVest Watchdog