Research In Motion, Ltd. (RIMM) has been moving lower within a severe downtrend as of late, paving the way for several “sell the rip” opportunities. However, RIMM is currently coiling at resistance, which indicates a breakout is ahead…but which way?
Double Inside Day
The daily chart shows RIMM has formed a Double Inside Day pattern, or ID2. As you may recall, a double inside day pattern forms when the range of the most recent day falls within the prior day’s range AND the range from two days ago falls within the range from three sessions ago.
In essence, Thursday’s range was inside Wednesday’s range, and Wednesday’s range was inside Tuesday’s range.
What does this mean? Price is coiling up in anticipation of a breakout with directional conviction.
Of course, it seems the entire market is in a holding pattern until the NFP number comes out, which will likely decide direction and conviction.
Confluence of Resistance
The daily chart shows the ID2 pattern has formed right at 3-month resistance at about $8.40, which also coincides with the monthly R1 Floor pivot.
The fact that this price pattern has formed at this fulcrum means a big move could be ahead, regardless of direction.
You see, an upside break through $8.40 leaves clear air above, while another rejection at this level paves the way for another test at the September lows. Either way, a substantial move could be seen.
Let the market decide direction, then execute your plan in the path of least resistance.
Let’s Talk Shop!
I’m hosting a FREE webinar after Tuesday’s market to provide some market outlook for the rest of October. It’s always fun to talk shop with others that are passionate about the market, so try to make it out.
It’s free, but space is limited, so make sure you register to reserve your spot. Use this link: http://www.anymeeting.com/PIID=E157DF858249
Buy One, Get One
Remember, if you buy my book in October, you’ll receive a live educational trading webinar in November – FREE!
There’s a reason why my book Secrets of a Pivot Boss has a 5-star rating on Amazon. Isn’t it time you see for yourself? Oh, and it’s still 30% off at the PivotBoss Shop!
Cheers!
Frank Ochoa
PivotBoss | Own the Market
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