Wednesday, December 12, 2012

Hello, NOK, RIMM!!- Comeback in the making?

NOK and RIMM stocks have seen nice bounces off their July and October lows respectively. NOK on close today was trading at $3.83 - over 125% higher than its July lows of $1.63 while RIMM is trading at $13.30 over 100% higher from its October lows of $6.22. 

After a initial lukewarm reception to Nokia's Lumia Windows 8 phones, they seem to be picking up some momentum. Latest pop in the stock came from 2 new phone launches in China, where it has given up a lot of share. We don't have sales numbers for these phones for this quarter yet but the stock price seems to be suggesting reviving fortunes for the company

RIMM on the other hand doesn't have any new phone on the market. The pop has come on upcoming launch of Blackberry 10 (expected on Jan 31'2013), videos of which have been circling around on Youtube.

Not sure if either of these stories warrants the kind of move these two stocks have seen. Is there more to it than meets the eye? Perhaps market is pricing in falling market share of AAPL picked up by one (or both) of these cellphone manufacturers. Wireless Carriers like Verizon, AT&T like to have more alternatives for the subscirbers, they would welcome players like RIMM and NOK who bring in differentiated product offerings. Also with more alternatives, it won't be easy for AAPL to hold the Carriers at ransom and ask for huge subsidies that Carriers currently offer them. That may another reason for market pricing in lower margins for AAPL going forward.

Either way, the technicals for NOK and RIMM look awesome, while AAPL seem to be in trouble.

NOK - Bull Flagging again. Target $4+ soon and $5 by end of January.

RIMM - Nice b/o last two days. Needs some rest before it makes its move to $14.60 and eventually to $18 before Blackberry launch.

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