NEW DIRECTIONAL CALL PLAYS

Research In Motion, - RIMM - close 72.09 change +0.38 stop 68.30

Company Description:
Research In Motion Limited (RIM) is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information, including e-mail, phone, short message service (SMS), Internet and intranet-based applications. RIM’s portfolio of products, services and embedded technologies are used by organizations worldwide and include the BlackBerry wireless solution, the RIM Wireless Handheld product line, software development tools and other software and hardware. (source: company press release or website)

Why We Like It:
RIMM has been in an uptrend since November and has been consolidating between $68.00 and $76.00 since mid February. The stock trades at a low 16 PE ratio when compared to its peers. The company has also been on the rumor block as a potential takeover target. The buzz has been that MSFT needs to get into the smart phone space and considering that both companies are heavily involved in the corporate market it seems like a good fit. The price tag for RIMM may be a little high though unless there is stock involved. Regardless of whether this happens or not, I believe RIMM is poised to move higher. The stock has been coiling and it double bottomed on Wednesday and Thursday. I think it is poised to test its recent highs and I suggest readers buy calls at current levels or on a pullback to the $71.00 area. Our target is $74.80 and $76.40. I would like to place a wide initial stop at $68.30. Our time frame is a couple of weeks.

Suggested Position: Long JUNE $75.00 CALL, current ask $2.39

Annotated chart:

Entry on April xx at $xx.xx
Earnings Date June 18, 2010 (unconfirmed)
Average Daily Volume: 15.3 million
Listed on April 29, 2010