(click on the chart for a larger image)
Starting with the blue color and letter code ‘A’, this pattern is a ‘bullish triangle’. This ‘bullish triangle’ pattern has a measured move price target near the $88 level, which is the same price target level from a recent analyst upgrade. This type of pattern is more of a medium term trading strategy and most likely be traded by medium term swing traders that primary trade breakouts.
The next pattern is a ‘gap fill’ pattern, depicted by the color aqua and letter code ‘B’. This gap is approximately $10 wide and most likely be traded by short term and medium term swing traders that trade gaps. It is reasonable to expect RIMM to fill a $10 gap within days since it has a high volatility.
Next is the ‘cup & handle’ pattern colored in green and marked by letter code ‘E’. This is another breakout pattern play for medium term swing traders. This ‘cup & handle’ pattern has a measured move price level near $82.50, which also coincide with the upper gap level.
Finally, the ‘trendline breakout’ colored in black with letter code ‘F’. This pattern is for day-traders or short-term traders with holding period of no more than a few days.
The chart is highlighted with two additional patterns that were not triggered by the recent price breakout. I have highlighted them to illustrate the trading patterns prior to the breakout.
The pattern marked by the color of red and letter code ‘C’ is a ‘bull flag’ pattern. The measured moved place it near $74, a price level that was reached after it has broken out of $72. This is another trading pattern for medium term swing traders.
The price channel pattern highlighted in purple and letter code ‘F’. Medium term swing traders that buy on weakness and sell on strength will likely trade these price channel patterns.
So depends on what type of trading strategy you are trading, the recent breakout from RIMM provides trading opportunity to many different strategies. It is rare for so many trading patterns triggered by a single price breakout.
Caveat: Although these trading patterns have a measured price target, but it doesn't mean the target will be hit. All it means is there is a potential for the price to reach the target level and we still need to use our trading plan to trade these patterns.
