Support and Resistance Example, Research in Motion (RIMM)

The following stock chart of Research in Motion (RIMM) offers a great example of simple support and resistance. Support and Resistance is a basic form of technical analysis used commonly every day to mark potential buy and sell points on a stock chart.

Note: This chart of Research in Motion is a eight month daily stock chart:

1. The blue 1 show us how Research in Motion originally broke through resistance at $143 to claim new highs. The stock though a few days later collapsed back into its base (2), a bearish sign.

2. The blue 2 shows us how Research in Motion collapsed not only back into its based but also below its key $129 support trendline. This heavy volume gap down day was a very bearish sign for the stock overall.

3. The blue 3 shows how RIMM climbed back above $125 which became support but couldn't hold up as the stock fell back into the $120s and below. This would have been another entry point to short the stock.

4. The blue 4 shows where RIMM has most recently found support around $100 - $103 a share.

Further Education

• Example 11, Support and Resistance Example, Lehman Brothers Brankruptcy
• Example 10, Descending Channel Example, Fastenal (FAST)
• Example 9, Wedge Pattern Example, Potash Corp (POT)
• Example 8, Research in Motion (RIMM) <–- Currently Viewing
• Example 7, Support and Resistance Example, Canadian Solar (CSIQ)
• Example 6, Stock Breakout Example, Frontline FRO
• Example 5, Symmetrical Triangle Example, Visa (V)

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