Don't buy on margin
There is a lot of optimism right now with hopes and expectations that big news is just around the corner. Two very respected posters, JimLur and Teecee, both are reminding us of the Wall Street wisdom of "volume preceeds price", and with the recent nice run and much heavier volume the last two trading days it's easy to get excited.
While for most stocks volume is an outstanding indicator of price movement, there has not been a strong correlation for IDCC over the past few years that I've been invested in the stock. In fact, this run up had price rising on low volume, and only the last couple of days has the volume stepped up. It is a very good sign, but be prudent with your $'s.
Here is a possible explanation for the recent activity. At the 15/16 level long term folks are pretty much fully invested. Shorters don't see a lot of downside and traders see this as "dead money" until resolution of arbitration, which looks to be next summer. Two weeks ago some folks started buying to try to get in ahead of earnings as sales have been strong for our licensees, and in anticipation of the court date. With new buyers and no new sellers, the price begins to climb. With the dates getting closer, more people buy a little more as they see the price moving up. The price goes through the 50 dma and now we start popping up on some technical screens. More strong price performance brings in the momentum players, and now we get volume and even stronger relative performance. Folks are smelling smoke and guessing about the fire. They may be exactly right, there may be big news coming any day. However, IDCC's management has historically done an outstanding job of avoiding leaks prior to news so unless there is another party involved that is buying up IDCC I don't think it is based on inside information.
It's times like these when the believers and optimists get all fired up (heck, I'm all fired up), but don't let the excitement convince you to play games with options or margin unless you really want to gamble with money you could use to buy and hold. When the big news hits there will be a few folks who make a killing, but it is a losers game.
