RIMM

The Elliott Wave Principle is best applied to large indexes/commodities where there is mass participation by the investment community. EWP generally states that counting waves for individual stocks is not recommended or worth the effort unless there is an unmistakable wave pattern developing.

I believe I may have spotted such a pattern with RIMM. I will say this, in the chart above, I did not attempt to nail down the exact wave degree for my labels. What I think is more important for a trade in the near/intermediate term is that a zigzag pattern is developing with wave C in progress (Or a wave 3 of a larger impulses) Either way, both would imply that we can expect to see a 5 wave pattern down for RIMM.

There are 3 main points that I want to highlight for RIMM's current situation:

1. As I mentioned above, there is a clear zigzag (ZZ) in progress (Or again like I stated, I can also count a new 5 wave impulse decline, but I won't do that yet because this would imply RIMM may fall to $15/share, which would take it back to it's 2004 price. However, this is something to consider if P3 in the SPX is as large as anticipated and this would fall right in line). Anyway, sorry for digressing.

Going back to the ZZ. A ZZ structure counts as an ABC pattern with a 5-3-5 subwave structure. Blue wave A shows 5 clear subwaves in red (lower roman numerals). Blue wave B is a very clear abc subwave. What remains is wave C and that should consist of 5 subwaves.

So far with the pullback from Wave B (blue) it looks like Wave C may have traced out subwave 'i'. Subwave 'ii' of C is in progress or may be complete. I would expect subwave iii, iv and v to take RIMM lower.

I used the common Fibonacci relationships when it comes to Waves A and C to highlight potential price targets as follows:

Wave C = .618 x A = $66.66
Wave C = A = $57.9
Wave C = 1.618 x A = $43.91

2. Head and Shoulders Formation

Don't know why but I've just been on the lookout for this formation lately. To me for some reason this pattern is sticking out. Take it for what it is but what I find interesting is that if you take the expected price movement should this H&S play out (measured by top of head to bottom of neckline), it falls right at the equality relationship for wave C and A.

3. April Price Gap

If price were to return to the $57 level, this would fit in nicely with price closing the gap, which is something to be expected.

I think for fun I will make a bold prediction and say that RIMM will trade back down to $57-58 by the end of the month. Why the end of the month. No real reason other than the fact that Blue wave A and B both took about 1 month to develop so I figured Wave C may already be halfway there.

Let's see what happens