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.

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