Research In Motion

Unlikely as it may seem, a similar setup is shaping up in shares of Research in Motion ( RIMM). RIMM has been Wall Street's whipping boy for a while now, and for good reason -- the firm's deteriorating business has been the biggest catalyst behind its 74% decline in the last 12 months.

So does the double bottom in RIMM scream "buy now" to investors?

Not just yet. RIMM's shares are still well below their own breakout level at $18 - they'd need to actually exceed that price for traders to be assured that the glut of supply of shares above $18 has been absorbed by buyers. Until that breakout level gets taken out, I'd recommend sitting on the sidelines.

We are getting some bullish evidence from RIMM's momentum right now -- 14-day RSI has been in an uptrend since mid-December. Because RSI is a leading indicator of price, that's a good sign for RIMM buyers - but not a good enough sign to buy shares before they push above $18.

While the level of RIMM hatred on Wall Street does send off some contrarian sparks, it only becomes a high-probability trade on a push above $18.

Research In Motion, one of Greenlight Capital's holdings, shows up on a list of 10 Stocks Owned by the Best Fund Managers.

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