RealNetworks (RNWK)

Company

"RealNetworks, Inc. is a leading creator of digital media services and software, such as Rhapsody, RealArcade and RealPlayer. Consumers use our services and software to find, play, purchase and manage free and premium digital content, including music, games and video. Broadcasters, network operators, media companies and enterprises use our products and services to create and deliver digital media to PCs, mobile phones and other consumer electronics devices." (company website)

RNWK 3-month stock chart

Sell short

RNWK 2yr stock chart RNWK 2-year chart

25-Jul-06. RealNetworks hit a new two-year high in June (see right), but it is having trouble staying at that level (see sidebar). The latest significant low was lower than the one before it, and RNWK has just failed the fourth test of the current downtrend (see dotted line in chart). Earnings, to be reported this week, are expected to be 10¢ less than a year ago. There is potential for a surprise here, so I will have to put some stops in place immediately.

  • Price momentum (PPO) — none
  • Trend (ADX) — weakening
  • Money flow (CMF) — money is flowing into RNWK
  • Relative strength (RSI) — neutral
  • Volume — tapering off

Sell

loss Bottom line
-1%

3-Aug-06. I really screwed up! The morning after RealNetworks reported earnings and a lowered forecast, The Market shook a collective finger of disapproval and RNWK shares plummeted. I was watching at the time and said to myself, "Jeez, I should cover at this price -- I'm way ahead!" But, as is often my wont, I didn't listen to myself. Instead, Greedy Paul said, "No, no, no! It's going down, down, down!"

Wrong. As it so often does, The Market soon had a change of heart. Sentiment has shifted and RNWK is showing signs of recovery: PPO, CMF, RSI, StochRSI. Oh, well. It has cost me a lot more to learn a lot less.

RNWK 1-year chart
RNWK 1-year chart