Daily Stock Pick of the Day - Wed., Sep 22, 2010

Stocks ground on through most of Tuesday as traders digested news that the Fed would be willing to provide "additional accommodation" to the ailing U.S. economy. 

The Dow closed up 7 points, or 0.1%, to 10,761, after climbing 70 points after the Fed released their policy statement.  The S&P 500 fell 2 points, or 0.3%, to 1,139, and the Nasdaq closed down 6 points, or 0.3%, to 2,349. The CBOE Volatility Index (VIX), which traders and investors look to as a measure of fear in the market, rose 4% to close above 22 today.  I don't think there's a pervasive feeling of fear in the market at this time, but the rise in the VIX today should be duly noted.

Financials and consumer discretionary names fell, but telecom gained.  Bank of America, Wells Fargo and Huntington Bancshares each closed lower today.  Apple and Research in Motion rose today.

In economic news today, housing starts rose 10.5%, the biggest gain since last November.  Also, permits for new construction rose 1.8% in August.  Keep your eye out for the existing home sales report coming out on Thursday and new home sales data is set to be released on Friday.

The stock I'm looking at today is InterDigital (IDCC).  IDCC designs and develops wireless technologies and products for use in celluar and other wireless related products.  It closed at $27.79 and it looks a little overbought here (see the Stochastic).  If this pulls back to the $25-$27 range, it would be good to pick up some shares.  It might be a good idea to scale in your position, if given the time.  My first target would be about $29, but if it really got some institutional buyers behind it, it could go to $32 on a longer-term basis. 

As always, stay cautious and happy trading!  Check out Wall Street Survivor below.  It's free to play and a great way to test your trading skills without the risk.  Gotta love that!

Obligatory disclaimer: This blog is for information only.  Past results do not guarantee future performance. All financial decisions involve risk and there are no guarantees.  The suggestions above are for informational purposes only and the blogger is not liable for any losses incurred as a result of actual investment activity on the part of the reader.