Research In Motion is neither a buy or a hold

Oct 21st, 2011 – Comment

For my money RIM is not a buy and there is scant argument for a hold.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Hi Lou,

I am getting so many mixed signals from various “experts” can you give me your valued opinion whether RIM is a “buy, hold or sell”.

You rock on Oakley’s AM640 morning show. How about also becoming a contributor on humbleandfredradio.com’s internet radio station that launched on Oct. 15.!!!

Cheers

Bob

 

Hey Bob,

Thanks for listening to the John Oakley Show on AM640. Humble Howard and I are lifelong friends and I support his pioneering efforts in the exploitation of internet radio.

This will be the fifth time that I review the prospects for Research In Motion Ltd. ( RIM TSX) since August 9, 2010. Time and again two factors weighed on my analysis. The first is the established downtrend that has plagued the stock. The other is the crushing competition that has been hurting their prospects in the smart phone and tablet markets. The lame corporate response to their recent network shut down speaks for itself.

Lets examine the charts for a better understanding  of the potential for RIM.

The three year chart says it all.  An entrenched downtrend and a death cross that surfaced in May of 2011 when the shares were trading at $50.00. Once the shares breached the long term support at $50.00 it was a time to get out of Dodge and head for the hills.

 

 

 

 

 The six month chart is another leaf from the top of the ugly tree. The shares are trying to hold onto support in the $22.00 range but there isn’t much good news coming from the momentum indicators. Both the RSI and MACD are signalling continued selling.

At this point the best you can hope for is to maintain support at these levels. Beyond that its a crap shoot. For my money RIM is not a buy and there is scant argument for a hold. Make sure to put December 15, 2011 on your calendar. The company is scheduled to report Q3 on that day and those results will speak volumes.

Technology companies enjoy a period of strength as we approach the holiday sales season. Watch how RIM performs up to December 15 to see if it is following or lagging the group.

 

Make it a profitable day and happy capitalism!

 

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