August 28 is a Key Date for RIMM Fans

I hang out on StockTwits a lot.  It’s a great community for active traders.  A large majority of the people I follow are technicians - head and shoulders, wedges, gaps and all of that good stuff.  I love technicals, but I incorporate fundamentals into my analysis as well.  I am not really into the traditional stuff – like PEs, Price Sales, Book Value, but I am more of an market observer.  The old Peter Lynch stuff.  Is there a buzz when you walk into a store? Are people standing in line for days to buy a product?  Is a company’s parking lot packed after hours?

I realize that is “touchy feely” stuff, but incorporated with technicals it gives me an edge.  Research in Motion’s March earnings call was a great example.  The technicians were all pumped up as RIMM’s stock price moved into the gap.  Calls for $82 were very loud.  Thanks to Morgan Stanley’s internet report – I stood my bearish ground.  The report encouraged the use my observation skills as well as my experience from the transition of Mini-computers to Personal Computers.  I have written about this numerous times (My RIM Rant).

RIMM laid another earnings egg and was taken to the woodshed closing down nearly 11% on Friday.   I listened to the Company’s Conference Call and it was pitiful.  Here is how the CEO answered a question on how RIMM would respond to the competitive threat from Apple and Google:

Be careful about you implicit assumptions in your question, or shall I say your explicit assumptions in your question. Yes, I think you guys will just have to watch and see what the plans are. I think there’s a lot of implicit and explicit assumptions that maybe should be examined. Part of that is the question of how much does — how powerful is their innovation is a good question. What’s the timing of it is a good question.

What?  The Reformed Broker said that he was speaking in tongues.  The analyst agree.  I have never seen so many downgrades following a call.

Personally, I believe RIMM days as a high flying stock are over.  They missed the turn.  It happens.  It’s a part of business.  This remains a contrarian opinion which is fine by me.  The Bulls need a catalyst and the Microsoft buyout rumors are already floating this weekend.  Microsoft just went through a brutal failed takeover attempt with Yahoo.  Why try another?

The next two months are make or break for RIMM – their savior phone and OS are scheduled to be released this summer.  For their stock’s sake, both must come out before the last day of their current quarter August 28.  The earlier the better.  The market needs to see the phone and more importantly customer’s reaction to it.  Also their revenue and earnings guidance is based on percentage of sales from the new products.

If the phone slips schedule it will be time for the RIMM fans to start learning to live without their beloved keyboards.  It was cool in its day.

My Long Apple Short iKillers Strategy continues to work.  Since I began tracking it here on 5/6, it has out performed the NASDAQ by 14.1%.  LASiK  +10.0% vs. NASDAQ -4.1%.