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Research In Motion Left For Dead

ByDragonfly Capital
AuthorGregory W. Harmon
Published 09/28/2012, 02:40 AM
Updated 05/14/2017, 06:45 AM
BB
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RSI
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This is the trade that started it all last year. A bearish 34/26 Risk Reversal, put on for 15 cents that returned 3.05 overnight.

Research in Motion (RIMM)
RIMM
Research in Motion (RIMM) has been left for dead since at least April of last year. There has been talk of a buyout that occasionally pops it but nothing interesting until this past week. New Subscribers? Hmmm. The chart shows a possibility of a bottom being made as it consolidated between about 6.35 and 7.75.

With a Relative Strength Index (RSI) that is trending higher near the mid-line and a Moving Average Convergence Divergence (MACD) indicator that is toying with a cross to positive. The momentum is higher. Under 6.20 look for a Measured Move to near zero. Resistance higher comes at 8.20-8.40 and then there is a gap up to 8.87.

The reaction to the last 6 earnings reports has been a move of about 16.9% on average or $1.10 making for an expected range of 6 to 8.10. The at-the-money weekly Straddles suggest a roughly $0.80 move by tomorrow with Implied Volatility at 240% above the historical at 53% and the October at 100%. I just took trade #3 for 2c.

Trade Idea 1: Buy the September 7 Call for $.44.

Trade Idea 2: Buy the September 7.5/8 Call Spread for $.12.

Trade Idea 3: Buy the September 6/8 bullish Risk Reversal for 1 cent.

Trade Idea 4: Buy the October5 weekly 6/8 bullish Risk Reversal for 2 cents.

Trade Idea 5: Sell the September 7 Straddle to buy the October 7 Straddle for $0.54.

Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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