InterDigital Inc (IDCC)

[Desert dweller]

Thanks, now if the company can only issue very good financial guidance today or next week to coincide with the time frame in your post, it could make that breakout you mentioned. If it were a wedge instead of a pennant, would that be considered a bad thing for chartists?

Message In Reply To:
Looks more like a pennant than a wedge to me, and this is a good thing.

From www.investopedia.com/terms/p/pennant.asp - "A pennant is a continuation pattern in technical analysis formed when there is a large movement in a stock, the flagpole, followed by a consolidation period with converging trendlines, the pennant, followed by a breakout movement in the same direction as the initial large movement, the second half of the flagpole."

(Chart)

"As can be seen in the above picture, there is a large rise in the stock, followed by a converging consolidation period that resembles a pennant and a resulting continuation of the initial trend."

"Investopedia Says... Pennants, which are similar to flags in terms of structure, have converging trendlines during their consolidation period and they last from one to three weeks. The volume at each period of the pennant is also important. The initial move must be met with large volume while the pennant should have weakening volume, followed by a large increase in volume during the breakout."

Looking at Worden Brothers TC2000 charting software, the initial movement, "the flagpole," occurred on 7/31, when IDCC popped 11.6% on huge volume of 2.77 million shares, the fourth-largest volume day of 2008. Thursday, 8/21 saw the lowest trading volume in IDCC in over 6 months, since 2/19/08.

From www.traders.com/Documentation/RESource_docs/NoviceTraders/Wedge.html - "Wedges should not be mistaken for pennants, which are much shorter in duration. A rising wedge is usually at least three weeks in forming and lasts approximately three months, perhaps four months in all."

The pennant is now three weeks old. If the pennant holds true, the "breakout movement" is imminent....