Technical Analysis of Financial Markets

Saturday, July 01, 2006

InterDigital Communications Corp. (IDCC) - Bearish Signals ?

Wireless semiconductor technology is a hot sector and bullish sentiment surrounds IDCC which looks well poised in that area. However, from a TA perspective, immediate bear signals seem to be forming. An intact uptrend since around May 22nd, seems over the past couple of weeks, to be progressing with diminishing volume. RSI is hovering over 70 which is considered overbought. Stochastics are well overbought – 80 is usually considered an overbought region. OBV looks as if it is gently making lower highs in a descending triangle fashion. Sooner than later, the uptrend will give in creating a sell signal, at which point the Fibonacci retracement levels may provide support. A good level of support may be found at the 61.8% Fibonacci retracement level of the uptrend occurring near the 50-day moving average.

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