Research in Motion Limited USA Technical Chart

One of the interesting chart I found today, where one can learn some new rules of trading. This is the technical chart of Research in Motion Limited (RIMM) listed on NASDAQ (USA). I’m using Doda-Donchian 3, Doda-Bollinger Bands and BBSqueeze indicators.

Around 25th Sept., 2010, price of RIMM stock closes above Doda-Donchian blue line; thus giving buy signal (around $48-$49). Although, this signal was weak as it was below kumo, but one could easily spot the flat upper red line on kumo, which means the price can move upward.

Another significant point there was, the price closed above Doda-Bollinger Bands, again conforming buy signal.

As expected, the price faced some resistance inside kumo and once it crossed kumo, it started its main bull run to around $67 (and counting).

The main thing to highlight is that from the day of buy signal till date, price went 3 times below Doda-Donchian line. One can expect a short-selling at that point; but price always got support on Doda-Bollinger band. The thickness of kumo was not justifying any bear in the market.

Did you see Bbsqueeze indicator at the bottom of the chart? Will post more about this indicator later. It’s also very powerful and interesting indicator.

At the time of writing this article, RIMM last close was $65.25 and is expected to rise further. The stop loss should be below kumo viz. currently at $60.