Occasionally, I give a shout out to one of the less experienced traders on the desk for sharing great trading information.  I am definitely not the type of person who offers faint praise.  In fact,  if you talk to those who are closest to me they probably would say that I am somewhat parsimonious with my compliments.  So when I do offer praise the person receiving the complement knows that I am truly impressed.

The call Joe P. made this morning in RIMM deserves huge props.  As a trader your job is so much easier if you are able to rely on well though tout trading ideas from your teammates.  Each of the traders on our desk understands that by sharing valuable trading information we all can make more money individually.  Joe P. brings a little something extra to the table than some of the other less experienced traders on our desk.  Joe P. has developed into an excellent technician from his years of studying longer term setups for his swing trading account.  In the brief time he has been a part of SMB he has added tremendous value to all of the traders on our desk.

Let’s discuss his call in RIMM today and why I asked him to share it with our desk during the morning meeting.  RIMM is a stock that everyone understands.  It is widely owned by retail and institutions.  It is traded by professional traders and momentum hedge funds.  Because it is so widely followed it tends to have great moves off of technical setups.  A technical setup is really gauging likely price action in a stock by understanding the psychology that led to the setup.

When Joe P. talked about RIMM during our meeting this morning he said that yesterday’s down move on very heavy volume had the look of an “exhaustion bottom”.  What he was saying was that those who had been accumulating the stock in the mid 60s since the last earnings report finally bailed out of the stock yesterday when it gapped down on the Citi downgrade.  As traders we are thankful that analysts create such great trading opportunities with their bullish/bearish calls.

Joe P. watched RIMM closely yesterday and took note of a buyer into the close at 55.20.  He shared the trading setup with the desk as a “Trade to Hold”.  In other words his expectation was for a multi-point move.  His recommendation was to buy on a pullback close to 55.25 on the Open and add to the position if it held above 56.  It turns out that his 58 target was somewhat conservative as it pushed higher to the 60 resistance after 2PM.

We will to extract some more money out of RIMM tomorrow.   Look for a quick down move on the Open to the 58.80 area to establish a long.  If it can hold above 60 we could see another 2-3 points of up side.

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