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Wireless Communications

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You wouldn't know it by the incessant chattering you see on cell phones, but the wireless communications sector is experiencing "difficult market conditions."

Nokia Daily/60-Minute Charts

Bucking the trend is Finnish phone maker Nokia (NOK). Nokia's net sales increased 22%, overall operating profits rose 8%, and Nokia now has a 30.6% share of the handset market. We can see on Nokia's daily chart that it broke out of a two-month basing pattern, but was unable to retrace 38.2% of its losses. While the daily MACD is suggesting prices should move higher, the 60- minute oscillator is suggesting a further pullback. Switching to the 60-minute chart shows that Nokia's current decline, down 0.91 today, should first find some support at the 50-period moving average. The next area I might think about going long Nokia, is if prices can retrace back to the 38.2% level around 28. At this level I would have some stops close by to lower my risk in a long position.

Research in Motion

Research in Motion (RIMM), which markets and manufactures "wireless solutions," has had a problem getting the MACD above the zero line. Much like Nokia, RIMM's 60-minute MACD is suggesting the daily MACD should have trouble cracking the zero level. The current "pullback" should be slowed down by the 50- period moving average, but I would look for the 38.2% level on the 60-minute chart, also the bottom of a gap at $30, to provide better support. We also have an up trend on the 60-minute chart we can monitor.

Jeffrey Canavan
Assistant Analyst

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