Research in Motion (RIMM) was in the news prominently last week as the stock plunged after slightly missing earnings expectations.  The stock has now found temporary support about its 200 day moving average.  How far will the bounce go?

The logical reaction after a large volatility momentum move down is an inflection (retracement) back to key moving averages, which would be located around $130 per share.  Today’s intraday action has the stock falling back for a potential retest of the 200 day average, which would be a bearish development – violation of the 200 day average would likely be a strong sell signal for funds and other traders who may have stops beneath that key level.

Nevertheless, should price retrace back to the upside, there are a few key price levels to keep in mind:

Again, the $130 per share confluence of the 20 and 50 period EMAs

The 38.2% Fibonacci retracement is at $126.75
The 50.0% Fibonacci retracement is at $130.80
The 62.8% Fibonacci retracement is at $134.84

(These numbers are close approximations)

Notice again that the $130 per share level would seem to favor a strong potential for resistance for this stock in the short-term – that area was also support (horizontal) line previously, and support – once broken – can become resistance.

Keep your eye on this stock and what it might mean for the broader market, and do be careful if you’re trading this highly volatile stock in any aggressive capacity.