Thursday, November 11, 2010

IDCC Watch

InterDigital Inc. (IDCC) has moved to bear phase on the parabolic sar, ending a 15-trading-day bull phase that brought the price up by 17.1%. Person's Proprietary Signal (pps) and the macd continue to be bullish.

ppspsarmacd obvh-a trend ma20ma50ma200
IDCC $34.80

The last two time the parabolic sar switched phases, the pps followed in switching within a day or two. However, the on-balance volume is moving sideways, so the signal lacks confirmation.

With no debt to speak of and a return on equity of 72% (!), IDCC is a growth stock with a vengeance. So my bias as a trader is to the bull side of the equation. It's not a stock that I would short.

However, IDCC has basically been tracing a sideways pattern since 2003. The recent high of $36.81, set on Monday, basically barely edges out the all-time high of $36.91, set in October 2006. And it price rebounded from that level like a squirrel from a cat.

IDCC, then, is a stock for the very patient swing trader, with $15 and $37 being more or less the boundaries of its oscillaton. That pattern suggests that there are old holdings at the $36 to $37 level that will be sold after four years in a losing position. A rise above $37 will be a tough nut to crack.

Reversal Levels
  • $36.91, +6.1% (all-time high, 2006)
  • $36.81, +5.8% (swing high)
  • $34.80 --- You are here.
  • $32.56, -6.4% (20-day moving average)
  • $29.79, -14.4% (50-day moving average)
  • $29.08, -16.4% (swing low)

Bottom line: I won't take a bear position on this stock. The financials are just too good.

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

  • h-a trend - Heikin-Ashi trend.
  • obv - On-Balance Volume.
  • pps - Person's Proprietary Signal.
  • psar - Parabolic Stop and Reverse
  • ma20 - 20-day moving average
  • ma50 - 50-day moving average
  • ma200 - 200-day moving average
  • macd - Moving Average Convergence-Divergence

About the glance: The colors indicate the state of each signal.
  • Signal Section:
    • pps, psar, macd: green for bull mode, red for bear.
  • Confirmation Section:
    • obv: green for uptrending, red for downtrending.
    • h-a trend: green for uptrending, red for downtrending.
  • Environment Section:
    • ma20, ma50, ma200: green for above the average, red for below the average.

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