A Trade Ripens in Blackberry Maker

I'm getting into question mode here. I like how it works where I pretend to ask myself the questions you should be asking. Like, "So Cramer, if this stock has disappointed twice in a row, if it's got competition that can really hurt it, if the Cramer tech rally has been left far behind in the past, why the hell are you recommending it?"

Ah, my friends, this isn't an investment -- it's a trade! Of course you don't want to hang on to RIM for a year; the stock is a darned roller coaster. But if you own it for a few months, you could probably make a lot of moolah.

Remember, we're trading RIM, not investing in it. Here's the trade. RIM's newest Blackberry model, the 8700, is currently only available from Cingular because it uses a GSM network -- industry gibberish for "global system for mobile communications." Basically, there are two different standards for mobile phones and Blackberry-like items: GSM and CDMA (that's code division multiple access, not that you really need to know what it stands for to make money off this trade).

This summer, the Blackberry 8700, RIM's newest, flagship product, is coming to CDMA via Verizon(VZ Quote). I think that when this rolls out in the Verizon store, you're going to see some serious sales, because we may be entering our first Blackberry replacement cycle.

But isn't this common knowledge? I mean, doesn't everybody know that the newest Blackberry is coming out in Verizon stores this summer? Shouldn't that info already be in the stock price?

You'd think the market would be smart like that, but you'd be wrong. Now, write this line down:

At the heart of every good trade is something really dumb.

Everybody hates RIM now. There's so much negativity, the stock won't get prodded up until it actually starts having some positive earnings news. It reports on the 29th. Now, it's really risky to buy a stock ahead of a quarter betting that it'll go well, but if I were a gambling man, and let me tell you, I'm the furthest thing from a gambling man, I'd bet that RIM reports a better than expected quarter. That should rouse the stock from its decline; it'll prime the market for the release of the Blackberry 8700 in Verizon stores and the new sales that'll generate.

Then and only then, the stock will get taken back up, and up far. People will tell you that RIM finally has it back together, that it's turned itself around, that it's a stock you absolutely must own.

As soon as that starts happening, you sell. That's the top. This stock is a roller coaster, and it'll keep being one.

Bottom line: RIM can't go much lower at this point because everybody who could possibly hate it already does. When the 8700 model starts appearing in Verizon stores, the stock will take off and start getting good buzz. That's when you sell. And if you have nerves of steel, you can buy the stock ahead of the quarter on the 29th, but please, do your homework first, only use limit orders and never buy after hours.