Double & Triple Bottoms & Tops, RIMM

The FOMC today came out with their report that they weren't going to raise interest rates, amidst concerns of inflation. My chart is set for my time zone (Mountain - AZ), so the FOMC took place at 11:15 am. Shortly thereafter, you see like a sigh of relief as the market dropped a little. But, the market rose in anticipation of unchanging interest rates that have held on for now over a year (Jun'06).

After initial 15-20 min. of digesting the news, I believe just waiting for the wording to come out, stocks did drop, but after the release of the news, for the next hr it being good, stocks started to rise again. But, they settled into a comfortable zone.

Note today's high is coincidentally the support where it's come down 3 times before in the uptrend. Think that's coincidence? BTW, other than putting lines for the double-triple bottoms and annotating those, all the other lines on all the graphs in this entry were already drawn.

A part of good charting is knowing how to read the chart. It always amazes me when things come to sit on or bump up against the lines I draw. I really say that in all humility because it seems almost magical to me. Ryan has really taught me well and it never ceases to have me in awe as to how manipulated prices are.

On the line chart of the $SPX, we can see we have a triple bottom. Today's close is slightly above the mid-points of the last 2 "highs". This triple bottom is still good, but there are 2 other triple bottoms that are better than this one. The one that is the next good one has all its bottoms level. The best triple bottom is when the bottoms are sloped upward. In the case we have here, they are sloped downward.

Since the confirmation signal of a reversal comes after the mid-points are broken and we have that, this further says where we were was a good support. How much of a bullish play will this be? I have no clue. It could go up to the 1485 (not far), 1522, 1560. This is based off this line chart.

However, in the candlestick view, 1490 is a support in the upward trend which it had 3 rotations. For 1510 support, it had 2 rotations. So, these would seem like they would be likely areas for resistance. Time will tell if what I'm seeing is correct or not.

I apologize for the messiness of this last chart. This is the chart I mainly work off that I'm always marking up.


Today I closed out on my bullish RIMM position for a small profit, as my trailing stop got triggered. I did not re-enter another position and will wait until it crosses over $226 strongly before entering another bullish entry. Sometimes RIMM gets into these compression patterns that last for 2-3 weeks and one can get whipsawed.

Though, I am thankful in the past 2-3 weeks I've been able to take profits from RIMM during this time. If it gets closer to the top of the rectangular pattern and begins to head down, I may take a position because $226 to $214 is still a $12 move in the stock, and getting an Aug230P would probably cost $8-9 at $225 and in 2 days to move down to $215 would make the option about $16, losing some time value. $7-8, however, is nothing to scoff at. I'll take it.

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