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On the "watch" list - RIMM

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A "key" test for RIMM

A brief review of the MCM Portfolio after today's bearish activity in stocks produced one glaring concern; Research In Motion (NASDAQ:RIMM). As most of you know, we considered this issue a bit too aggressive for the model portfolio but since it is now included with the bullish plays, we are going to trade it like any other conservative spread. The issue dropped almost 6% on moderate volume and is currently undergoing a key test of technical strength near $77. The selling pressure was related to a combination of broad weakness in the technology segment and concerns over greater competition in the wireless e-mail market. While some analysts believe the sell-off was a bit overdone, it is safe to say that any further downside activity would be a potential exit signal for conservative spread traders. However, most of the readers in the position probably have a more aggressive outlook, thus they might want to focus on the next level of buying support near $70. Hopefully, RIMM can establish a lateral trend based on the previous (JAN-FEB) trading range near that price but, at the same time, a move below that area would certainly confirm a bearish outlook for the issue.

MCM Staff

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