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Mike Lazaridis, co-CEO of Research In Motion. In response to a recent blackout, RIM will be offering a selection of premium apps to customers. Ultimately, the market will let the company know if its actions were enough. (Eric Risberg/Eric Risberg/Associated Press)
Mike Lazaridis, co-CEO of Research In Motion. In response to a recent blackout, RIM will be offering a selection of premium apps to customers. Ultimately, the market will let the company know if its actions were enough. (Eric Risberg/Eric Risberg/Associated Press)

Schizas' Mailbag

RIM is neither a buy nor a hold Add to ...

Hi Lou,

I am getting so many mixed signals from various “experts.” Can you give me your valued opinion whether Research In Motion Ltd. is a “buy, hold or sell?” Cheers, Bob

Hey Bob,

This will be the fifth time that I review the prospects for RIM since Aug. 9, 2010. Time and again two factors weighed on my analysis. The first is the established downtrend that has plagued the stock. The other is the crushing competition that has been hurting their prospects in the smart phone and tablet markets. The lame corporate response to their recent network shut down speaks for itself.

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Let's examine the charts for a better understanding of the potential for RIM .

The three-year chart says it all. An entrenched downtrend and a death cross that surfaced in May, 2011, when the shares were trading at $50. Once the shares breached the long-term support at $50 it was a time to get out of Dodge and head for the hills.

The six-month chart is another leaf from the top of the ugly tree. The shares are trying to hold onto support in the $22 range, but there isn’t much good news coming from the momentum indicators. Both the RSI and MACD are signalling continued selling.

At this point the best you can hope for is to maintain support at these levels. Beyond that it's a crap shoot. For my money, RIM is not a buy and there is scant argument for a hold. Make sure to put Dec. 15 on your calendar. The company is scheduled to report third-quarter results on that day, and those results will speak volumes.

Technology companies enjoy a period of strength as we approach the holiday sales season. Watch how RIM performs up to Dec. 15 to see if it is following or lagging the group.

Have your own question for Lou? Send it in to lschizas@globeandmail.com.

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