Research in Motion (RIMM) made a nice rally from its Dec-02-2009 low @ $58.13 to its Dec-11-2009 high @ $66.50 before failing to break resistance at its 200 day moving average and then retreating to form a bearish engulfing candle pattern at the close of last week’s final trading session.
Today, it ceded further ground by completing a 38.2% retracement of this upward move and now barely trades above its next key support level @ $62.74 or 50 day moving average.
Despite securing a distribution partnership with China Mobile, which allows it to tap into the Chinese smartphone market and eventually grow its top line revenue, bulls appear to be exhausted as the stock is succumbing to an overbought condition.
Volume in today’s options trading was relatively heavy for its December $60 (15,441 contracts) and $65 ($15,136 contracts) calls, in addition to the January $80 (13,746 contracts) calls. All three were down in price to suggest some selling or paring back.
Should RIMM fail to hold support at its 50 day moving average, the potential for more bearish retracements to its 50% level (@ $62.32) and 61.8% level (@ $61.33) increases.
Overall, the fundamentals are still bullish even though the smartphone landscape is becoming more competitive with Google’s Android invading the market next year.
However, this stock deserves to be monitored as it could present a buying opportunity on either a retracement pullback or successful retest and breakout above its 200 day moving average.
Daily Chart for RIMM as of Dec-14-2009
Author’s Disclosures: Author has bullish exposure to RIMM via long December 55 calls and short December 60 calls and short December 55 puts as of Dec-01-2009.
*Disclaimers: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.
Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.
Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.
Was yesterday the final thrust from bulls as the S&P 500 (SPY) cleared a new 52 week high? While I do not profess to be a modern day fortune teller, which by the way is what my wife regards all market analysts and strategists to merely be, I will attempt to answer this question.
It is evident is that the SPY is struggling with the resistance levels of its October high. However, to put things into proper perspective, the SPY bottomed on Nov-02-2009 @ $103.08 and peaked on Nov-11-2009 @ 110.82 for @ +7.5% gain. This is a pretty good market swing and some consolidation or correction may be appropriate after 8 out 9 positive trading sessions.
Under such conditions, I tend to anticipate some degree of a Fibonacci retracement correction. As I currently write this report, the SPY has already completed a 23.6% retracement to $108.89. Should this bearish move gain momentum, here are a few downside targets and Fibonacci support levels for reference points:
a 38.2% move would take the SPY to $107.88;
a 50.0% move equates to @ $106.98;
and a 61.8% move brings us to @ $106.
of course, a 100% retracement simply brings us right back to where we began on Nov-02-2009, i.e. $103.08.
Now one day does not a market make, but when the SPY ignores several positive news events (e.g. better than expected jobless claims, positive earnings report and guidance from Walmart (WMT), and an M&A announcement that Hewlett Packard (HPQ) is buying 3Com (COMS) at a 39% premium!) and makes a new 3 day low on declining volume, it makes me scratch myself.
The large build up in oil supply inventories as indicated in the EIA Petroleum Status report was overwhelmingly bearish and too much for the market to bear (pun unintended). Tomorrow is Friday the 13th and it will be interesting to see what type of market direction influence we get from the International Trade and Consumer Sentiment reports.
At present, It is too early to determine if this is the beginning of a correction or consolidation. If the SPY takes out the Nov-09-2009 low, then I feel pretty confident that it will also fill the gap prior to this date and go on to test support at the 50% retracement levels.
Ideally, if bullish trends are to remain intact, then any correction should produce a higher low or at the very minimum a successful test of support at the October lows for a potential triple bottom formation. Only time will tell, but this is the existing market condition for now. (See chart below for further reference.)
Daily Chart of SPY as of Nov-12-2009
*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.
Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.
Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.
For over a week, the SPY has been flashing bearish omens as its rate of change and stochastic indicators headed south (see chart below). Today the exchange traded fund proxy for the S&P 500 broke through the support of its 20 day moving average. If it fails to recoup this important territory, look for it to decline further and test support at the 1040 and 1020 levels.
SPY Daily Chart as of 10-26-2009
*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.
Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.
Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.
The following exchange traded funds are exhibiting significant bullish or bearish chart trading patterns:
U.S.. Equities
Diamonds Trust ETF (DIA) is making a new 5 day low on an +44% surging volume. It has breached short-term support levels and is in danger of initiating a new short-term downtrend.
SPDR S&P 500 Trust ETF (SPY) is making a new 5 day low on an +21% surging volume. It has breached short-term support levels and is in danger of initiating a new short-term downtrend.
Russell 2000 Index ETF (IWM) is making a new 13 day low on an +46% surging volume. It has cleaving on the the edge of the cliff for the all important 50 day moving average. Keep your eyes on this one. If it breaks, then this increases the possibility for a new intermediate term downtrend.
Major Sector ETFs which represent 10 broad based sectors of the U.S. economy are displaying broad weakness. 9 out of ten of the sectors are making new 5 day lows. They are as follow: XLB, XLF, IYX, XLU, XLE, XLV, XLI, XLP, XLK. If we do not get a reversal before the end of the day, anticipate further short-term trend downgrades to the group.
Key Industry ETFs are also experiencing broad weakness. 7 out of 10 of the exchange traded funds tracked by Hillbent are making new 5 day lows. 6 of these are violating key support levels or moving averages. I would also anticipate further trend downgrades unless the market can rally signficantly in the last 2 hours of trading.
International Equities
Americas ETFs: EWC, EWW, and ISI are all making new 5 day lows and have breached their support levels..
Europe ETFs: EWG, EWQ, IEV, and VGK are all making new 5 day lows. The group represents the core members of the EU which is obviously taking its cues from the U.S. markets. Their short-term uptrends have been reversed, which has bearish implications. The RSX and EWU, while down, are relatively the strongest amongst today’s European losers.
Asian Pacific ETFs: First the good news… The FXI has made another 52 week high. The bad news is that EWA, EWH, EWM, and VNM, some of the regions strongest investment vehicles, are all making new 5 day lows. 9 out of the 11 members in this group traced by Hillbent.com are moving in the direction of short-term downtrends, which is bearish for the region overall.
Emerging Markets ETFs: GAF has made a new 5 day low and failed near-term support. Its next move could be a test of its 50 day M.A. The group is down overall and several other members are making new 5 day lows, but appear to be consolidating.
Commodities
DB Commodity Index ETF (DBC) broke out to a new 5 day high, but has completely reversed it gains and forming a long bearish engulfing candle pattern on weaker volume.
SPDR Gold Trust ETF (GLD) has made a new 5 day low and is trading beneath its 20 day moving average. After consolidating for almost 2 weeks, it has broken support appears headed to test support @ the 100 level.
IShares Silver ETF(SLV) is mimicing the price movement of gold and has also established a new 5 day low and violated its 20 day moving average.
Forex
DB U.S. Dollar Bullish Fund ETF (UUP) has broken out to a new 5 day hign and is testing the resistance of the upper downtrend channel. Volume is surging a whopping +375%. Obviously, someone is short and has to cover the weak dollar.
Bonds
20 Year Plus Treasury ETF (TLT) has made a new 5 day low and appears to be testing the support levels near its September lows. The interest rate sensitive bond fund is responding to a spike in interest rates and the higher dollar.
*Note that results generated in this report may be based upon end-of-day or real time intra-day observations, but posted in a delayed manner. This list is not intended for specific buy or sell recommendations, but instead highlight bullish or bearish trading patterns for highly liquid exchange traded funds that are used by investors to mimic or represent major asset classes, industries, sectors, and geographical regions.
*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.
Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.
Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.
The following stocks are moving up or down on surging volume and/or exhibiting bullish or bearish breakout patterns:
S&P 500 Components (Large Caps)
Credit Services: SLM Corp (SLM), the government agency better known as Sallie Mae, traded up +20.67% on +394% volume surge and broke above the resistance of its July 2009 highs. In after-hours, the stock is up another +3.72%.
Medical Instruments & Supplies: Boston Scientific Corp (BSX) traded down -4.20% on +384% volume surge and made a new 100 day low. The next level of support is @ $8.01 which occurred April-28-2009.
Semiconductor - Memory Chips: Sandisk Corp (SNDK) traded up +9.54% on +365% volume surge. The stock made a new 52 week high and broke above the resistance of its September high.
Diversified Computer Systems: Sun Microsystems (JAVA) traded down -3.33% on +343% volume surge. The stock made a new 100 day low and broke below its October lows and is currently holding support previously established at its May 2009 lows.
Regional Midwest Banks: Northern Trust Corp (NTRS) traded down -5.73% on +281% volume surge. The stock made a new 65 day low and broke below key support levels previously established at its October, September, and July lows. In after hours trading, the stock is up +6.07%.
S&P 400 Components (Mid Caps)
Processing Systems & Products: Polycom (PLCM) traded down -16.53% on +958% volume surge. The stock made a new 65 day low and has initiated a new intermediate downtrend. Resistance is @ $22.25 or its August-2009 lows.
Staffing & Outsourcing Services: Manpower (MAN) traded down -13.25% on +501% volume surge and initiated new short-term and intermediate downtrends by making a new 5 day low.
Packaging & Containers: Tupperware Brands (TUP) traded up +8.07% on +363% volume surge. Its stock had been consolidating for the past six trading days before breaking out to a new 52 week high.
Semiconductor Equipment & Materials: Cree Inc. (CREE) traded up +11.49% on +344% volume surge. Today marked the 3rd consecutive day that it has made a new 52 week high.
Money Center Banks: TCF Financial (TCB) traded down -9.43% on +294% volume surge and made a new 13 day low. There appears to be solid support for the stock @ $12.25-12.50 levels.
S&P 600 Components (Small Caps)
Regional Southeast Banks: Hancock Holding Co. (HBHC) traded up +2.10% on +1684% volume surge. The stock’s short-term and intermediate trends are down but it is bouncing off of key support levels that were tested in Tuesday’s trading session.
Restaurants: PF Changs China Bistro (PFCB traded down -9.96% on +621% volume surge. The stock violated support at its October low as it made a new 35 day new low.
Semiconductor - Integrated Circuits: Supertex Inc. (SUPX) traded down -12.99% on +542% volume surge and made a new 13 day low by breaking support @ 27.57. SUPX managed to successfully hold support at its 200 day moving average. In after hous trading, the stock was up +14.93%.
Semiconductor Equpiment & Materials: Cymer Inc. (CYMI) traded down -3.04% on +420% volume surge and breaking out to a new 5 day high.
Regional Pacific Banks: Glacier Bancorp Inc. (GBCI) traded down -2.92% on +341% volume surge. The stock made a new 65 day low and continued its downtrend. In after hours trading, it was down an additional -1.16%.
*Note that results generated in this report may be based upon end-of-day or real time intra-day observations, but posted in a delayed manner. This list is not intended for specific buy or sell recommendations, but instead highlight bullish or bearish institutional trading activity in very liquid large-cap, mid-cap, and small-cap stocks that represent the S&P 1500 super composite index.
*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.
Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.
Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.