Fitz Bits: RIMM Approaches $100

Today, we're going to take a look at the following stocks:

• Research In Motion (RIMM - commentary - Cramer's Take)
• First Solar (FSLR - commentary - Cramer's Take)
• Seagate (STX - commentary - Cramer's Take)
• FedEx (FDX - commentary - Cramer's Take) ETF
• Tiffany (TIF - commentary - Cramer's Take)
• Owens-Illinois (OI - commentary - Cramer's Take)

Each day, I'm featuring several reader requests for the current technical take on a stock. I can't assure you that I'll get to yours, but I will certainly make every attempt to do so, as long as the stock meets the following criteria.

1. The average daily trading volume needs to exceed 250,000 shares. If a stock trades too thinly, chart analysis doesn't help much, because there just are not that many traders involved. One big buy or sell order can move the stock in ways that chart analysis just cannot predict. So let's stay above 250,000 daily shares.

2. The stock really needs to be trading above $5. Sub-$5 stocks don't get the same treatment by institutions and portfolio managers. Also, many traders set their trading screens to ignore stocks below $5 just to cut down on their trading candidates. While I'm sure your favorite penny stock is the next undiscovered gem, I'm not in the business of breaking news stories ... so once your gem is discovered, let me know, and I'll take a look at the chart.

3. Make sure you check my recent "3 Stocks" videos. I don't want to be too redundant, so if I've recently covered a stock in video format, I won't repeat it here.

3 Stocks I Saw On TV

Hopefully, you've noticed that I alternate between daily and weekly bars in the charts. It's important to understand the underlying rationale for choosing one time frame over another. I differentiate between these time frames in pretty simple terms.

The longer time frame -- the weekly bar chart -- is my "decision" time frame. I want to remain in phase with the trend, and I use the weekly bar chart to identify the trend. So I'll feature a weekly chart when I want to emphasize a certain aspect of the prevailing trend -- not a specific buy or sell point. This weekly chart is the timeframe in which I make my decision: Do I want to buy or sell the stock?

The daily chart is my "action" time frame. Once a decision is made on the basis of the weekly time frame, then we zoom in on the daily chart to choose that level at which action is taken. The daily time frame is my preferred frame of reference for actually implementing the decisions I've made on the weekly chart.

In your own analysis, make sure you are using different timeframes for different things, otherwise your actions will largely be a function of your emotions.

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I've drawn the red line in Research In Motion right at $100, which marks the most likely place for all those limit sell orders. RIMM continues to trend lower since peaking in November, but a move back above $100 puts it back on track.

Meanwhile, I'd be patient and hope for another pullback to offer a better entry. Oh, and if you're bearish on RIMM, then I'd take a stab at the short side right now, with a buy stop just above $100.

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First Solar gapped higher and ran for a nice gain on Wednesday. Yesterday's little pullback could be nothing more than a little backing and filling. If you want to own this stock, though, try waiting for the bears to test the breakout. In this volatile market, it's likely to happen soon. Then you can buy it closer to $200.

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Seagate has been moving steadily higher since the January climax low. But yesterday's trading range amounts to a bearish engulfing pattern, where the open is above the prior day's high and the close is below the prior day's close. That usually implicates additional downside. If you're short, try putting a stop just above $24, which is where I think it's safe to buy.

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FedEx has been really meandering around these past several months, making ever-deeper lows as it bounces along the 50-day moving average. If the current support level of $87.50 holds up for a while, then the bulls just might be able to push the stock out of this pattern and reverse the downtrend. That's when I'd buy.

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Notice how the 50-day moving average has been the general area where supply has overwhelmed demand on this daily chart of Tiffany. The stock hit a major low in January but is now having trouble getting back on track. Unfortunately, even if the bulls can manage to push the stock back above the 50-day moving average, the prior support line at $45 should be the next level where sellers lurk. Simply put, I think there are better jewels to be owned than TIF.

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Owens-Illinois had been in a very steady and reliable uptrend until January, when the bottom fell out. But the stock is now right back at the top of the channel. If you're feeling pretty bullish and believe the stock is just going to pop out the top of the channel, think again. Over the past several months, it's tagged that resistance line and always pulled back. Expect the expected ... and wait for another pullback before buying.

Be careful out there.

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At the time of publication, Fitzpatrick had no positions in the stocks mentioned, though positions may change at any time.

Dan Fitzpatrick is the publisher of StockMarketMentor.com, an advisory newsletter and educational forum dedicated to teaching effective risk management and trading methodologies to aspiring traders and investors. He is a former hedge fund manager and a member of the Market Technicians Association, and he now trades from his home in San Diego, Calif. While Fitzpatrick holds various securities licenses, he does not give recommendations to buy or sell stocks. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. He appreciates your feedback; click here to send him an email.