RIMM - Research In Motion

In looking through a variety of analyst coverage on RIMM there are some who love the stock and some who hate it. That in itself is unusual. There are some analysts who communicate their ideas about RIMM with unusual fervor, almost as if they're blasting away on a chat room message board. AmTech in particular has been telling clients to be aggressive buyers ahead of earnings saying recent weakness is a buying opportunity ahead of results - seeing 25% upside to their $160 target. But Citigroup thinks that while Pearl sales have been strong, they feel Pearl has cannibalized sales of other Blackberry products and recently lowered their target from $104 to $92. So the dichotomy of thought is about as wide as you will find where analyst opinion on a stock is concerned on Wall Street. The point and figure chart shows this stock is not going to drift one way or the other after earnings tonight: It's actually pretty impressive that this one managed to hold support at its 50 day moving average recently (see below) and it really has the look of a short term REVERSE head and shoulders with the neckline being roughly at $135. You could also boil the last few weeks of trading down and make an argument for a bullish pennant formation.

The range of the calls and puts is between the $160 strike on the call side and $120 on the put side where volume is over 1,000 contracts today in the January chain. I'm just staying off to the sidelines. I doubt RIMM does two huge gap ups quarter to quarter, but there's a good chance the trend can remain higher unless they disclose they've royally screwed up since the last earnings report.

While I generally hate the idea that the best idea on Wall Street these days is this lame idea to pump and buy stocks at all time highs (it is pervasive) there are some exceptions and RIMM could be one of them. Companies with near monopolies fit into the "exception" category. Of course, the issue for RIMM is becoming just how long they hold their veritable monopoly. Tonight is going to be very interesting.