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Two Ways: RIMM Shares Tumble


Strengthen your portfolio in good times and bad.

RIMM Beats, But Shares Tumble

Shares of Research In Motion (RIMM) are lower in premarket trading. The Blackberry-maker reported second-quarter earnings last night after the bell, earning $1.03 a share -- $0.03 better than Wall Street expectations.

Revenues rose 36.8% year-over-year to $3.53 billion vs. $3.62 billion consensus. Gross margins also came in at 44.1% while the company added a net 3.8 million subscribers. But the company issued mixed-guidance for the third quarter with earnings coming in between $1 and $1.08 a share with revenues between $3.6 and $3.85 billion.

Wall Street was expecting $1.05 EPS on $3.92 billion revenues. Shares are lower by 9% to $73.49.

From the Bull Pen: Here are comments from our tech guru Professor Sean Udall: "I'll look to add on this, but only a partial position or using a buy-write (covered call) strategy as I think the stock can now trade closer to the $68 to $71 range. But I think RIMM can trade back to the $90 to $100 level sometime in the next two quarters." Consider his plan, but remember to use defined risk and have an exit plan.

From the Bear Cave: The long-term picture gets tougher every day for RIMM as it's a niche technology company, and increased competition will only eat away at its market share. Nonetheless, bears can look to the broader indices for a downside play. The tech-heavy Nasdaq 100 (NDX) spiked to a new high on Wednesday and followed-through with yesterday's performance. Bears can use the Ultrashort QQQ (QID), consider a sell stop 2% below entry.

A Quick Check Around the World

Asian trading closed with the Nikkei -2.64%%, India -0.53%, Hang Seng -0.13%, Shanghai -0.52%, and Taiwan 0.29%.

Across the pond, we see the FTSE 0.61%, CAC 0.19%, DAX 0.18%

As of 8:00 a.m. EST, S&P Futures are trading +3.75 to 1048.00 and Nasdaq futures are +4.000 to 1703.50.

A Look at Commodities

Over in commodities, crude oil is +0.43 to 66.32 while gold is -0.60 to 998.30 this morning. Silver is -2.00 to 16.28 and copper +2.400 to 272.35.

The dollar index is -0.17 to 76.9450.

On the Radar


08:30 Durable Orders 0.1% cons.
08:30 Durables ex. Transportation 0.8% cons.
09:55 Michigan Sentiment Revised 70.0 cons
10:00 New Home Sales 440k cons.

Happy Fat Friday! Good luck and have a great weekend!
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No positions in stocks mentioned.

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