Research In Motion Earnings Trade Ideas
Dragonfly Capital | Dec 23, 2012 01:30AM ET
RIMM is building a bull flag under 14.40 resistance, a level that has been important in the past. The RSI has become overbought and the MACD is near a cross to negative. The short term is set up for more consolidation or a pull back. That said the trend is higher and all of the Simple Moving Averages (SMA) are in agreement. A move above that resistance has a measured Move higher to 16 and there is resistance higher at 17.45.
Short interest is high at over 20%. Support below comes at 12.10 and 11 followed by 10.25 and 9.65. The reaction to the last 6 earnings reports has been a move of about 15.83% on average or $2.20 making for an expected range of 11.60 to 16.10. The at-the money December Straddles suggest a roughly similar $1.50 move by Expiry with Implied Volatility at 240% above the January at 100%.
Trade Idea 1: Buy the December 14 Straddle for $1.53.
Trade Idea 2: Buy the December 14/16 Call Spread for $0.50.
Trade Idea 3: Buy the December Monthly/December 28 Expiry 16 Call Calendar for $0.18.
Trade Idea 4: Buy the January Monthly 14/17.5 Call Spread for $1.00.
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 Original post
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