InterDigital Inc (IDCC)

[Alley]

THE MARKET + IDCC WEEK OVERVIEW

THE MARKET
Looks like the bulls went on an extended vacation this week. The elation of the December Christmas overbought rally had them reeling in ecstasy. Looks like the 'come down' from the climax took a bit of pleasure out of the act. Wow ... this is getting rather graphic...sorry no pictures.

Lets put things in perspective.
[] Limited tax loss selling in December 04....pumping up markets to overbought status.
[] No January effect..In the past Investors took advantage of the last couple of weeks of each year to unload those stocks that had disappointed them. The price action in many cases accelerated downtrends (including heavy downside volume). As a result, many individual stocks developed deeply oversold conditions; and once the “artificial” selling pressure was removed oversold technical rallies (bounces) ensued. These knee-jerk upside moves (short covering and/or short-term trading of very cheap stocks) dominated the markets activity during the first couple weeks of the New Year. Hence, “The January Effect”
[] Double-digit gains for all of the market’s leading averages LAST FEW MONTHS accelerating Nov. thru December....SO...Let's take a little profit first week no tax Consequences for 16 months.Investing mentality changing.

[] No earth shaking news to propel the markets


A few facts
EQUITY FUNDS REPORT net cash outflows totaling -$1.058 billion in the week ended
1/05/05; That makes it two weeks in a row for outflows ...
In the last two years the opposite was the case. I can't remember in the last two years when we had two weeks back to back of outflows....hummmm is this a trend reversal? http://www.amgdata.com/

MARGIN DEBT up 40% in the last 4 months of the year for Nasdaq stocks...
Careful we wouldn't want to see any margin calls
http://www.nasd.com/stellent/idcplg?IdcService=SS_GET_PAGE&ssDocName=NASDW_005923&ssSourceNo

JOBLESS CLAIMS....Up this week
NEW JOBS Not up to expectations...but not a disaster U.S. employers added 157,000
We really needed to get a solid number to reverse momentum.

TECHNICALLY SPEAKING... Ugly week.

THE NAZ...Breaking thru the 5-day 20day and today closing below the 50day moving average ... we don't want to stay below 2080 ...we did break below that today at 2076.69 . Next major support ..1995.44 the 100 day moving average.

The S&P 500 has important support at 1183, with 1172-1175 and 1160-1163 Resistance is 1193 and 1198-1200.


The Dow Support at 10,575-10,583 and 10,530-10,540 Resistance is 10,640-10,650 and 10,700-10,710.

Up trend lines have either been broken or are on shaky ground.


EARNINGS SEASON is in front of us..INTEL reports on Tuesday...so we will wait to see
Looking for a technical relief rally from overslod conditions but I suspect a turn back down unless we get some strong positive news...be careful out there...

IDCC
Same old same old...
Old Rip cashes in a few of his chips....some soothsayers arrive to read the tea leaves... Many investors follow Rips lead ... a debate ensues as to the hidden message behind the unplanned sales ... the stock looses 3.18 off its recent high from 6 trading days ago and momentum reversed.

A little TA
We broke through the 5 day moving average of 20.66
We broke through the 20 day moving average of 21.49
Key support is our 50 day moving avenge of 19.77 if we break through that it takes us to
the low 18's high 17's.
Our Average daily volume in the last 5 days has accelerated during the downturn
Candlestick charts showed a Bearish Engulfing on Friday. This occurs in an uptrend, the Engulfing depicts an opening at a new high, followed by a high volume sell-off that closes at or below the previous day’s open. This signifies that the uptrend has been hurt and the bears may be gaining strength. The Engulfing indicator is also the first two days of the Three Outside patterns.

AFTER THOUGHT
I became more of a lurker this past Spring after several years of frequently posting TA on the board. The break was needed. As I sit back and observe the recent activity of the stock and certain board members I find a comfortable predictability ... sometimes it's down right humorous... that was not meant to be condescending.
We strive to understand management never really knowing anymore then they wish us to know. Management is sometimes concealing what they themselves don't know. We speculate,hypothecate,theorize,analyze,looking for a future truth that has not arrived.
This is normal...healthy human behavior. At the end of the day....the truth shall set us free.
I am long...call it blind faith....call it practical reasoning...at the end of the day it doesn't matter what you call it....Until the arbitration outcome is disclosed we are due for some volatility. Use the weakness to your advantage. The ship is coming in....

As always your thoughts and comments are welcome.Alley