THE The Dean’s Trades: Short RIMM & Long PALM
September 27th, 2008 at 9:06 pm Posted by The Dean
Here’s a pre-market play that I think is long overdue. Research in Motion (RIMM) met the street’s earnings guidance last week, but forecasted for a weaker 3rd quarter. Their conference call also suggested a nervous attitude towards competitors who are slowly gaining market share on the once, unstoppable BlackBerry device.
In order to properly play this out, I feel you should go short Research in Motion (RIMM), but go long Palm (PALM) at the same time. The idea would be to take into account the market inefficiencies between the two. Palm is slowly gaining back market share in the phone industry; with the $99 Centro being such a hot ticket right now, it overshadows such devices as the BlackBerry, AT&T Tilt, and ever-so popular iPhone. With such an uncertainty in the market place, and with a market that’s well oversold, I feel going long Palm would be the best way to negate any rising affects in Research in Motion’s stock. This is a long term play, so take a look at the technical’s before you put in an exact order.
