Market Context: From Underperformance to Recovery
Iridium Communications has transitioned from a prolonged corrective phase into a strong recovery structure. After an extended downtrend, price action began stabilising and gradually formed a rounded base, a classic transition from distribution to accumulation.
What makes this structure particularly interesting is the shift in behaviour:
- Price is now trading above key moving averages
- Momentum indicators are strengthening
- Breakout structure is becoming clearer
This suggests that the market is no longer in a defensive phase, but rather entering a potential expansion phase.
1) Saucer Pattern Formation (Rounded Bottom)
The most notable structure here is the saucer pattern, which typically reflects a slow and controlled shift in sentiment.
Instead of aggressive buying, this pattern shows:
- Gradual exhaustion of selling pressure
- Steady accumulation
- Increasing participation over time
This type of formation is generally more sustainable compared to sharp V-shaped reversals, as it builds a stronger base.
2) Neckline Break and Confirmation
The key technical level was the neckline zone around the mid-30s.
We observed:
- Multiple rejections at this level in the past
- A clear breakout with strong momentum
- Follow-through buying after the breakout
This breakout confirms that the previous resistance has now transitioned into a structural pivot zone.
3) Measuring the Move (Depth Projection)
Using the depth of the saucer formation:
- The distance from the base to the neckline provides a projection framework
- This measured move aligns with the 47.50 region
Importantly, this level is not arbitrary, it also coincides with a historical resistance zone, increasing its technical relevance.
4) Trade Management Approach (Key Focus)
From a risk management perspective, the focus shifts from prediction to protection.
Instead of fixing a take-profit level:
- We prefer trailing the stop loss below structure
- This allows participation if momentum extends beyond expectations
- At the same time, it protects capital if the structure fails
This approach aligns with trend-following principles:
Let the market decide how far it wants to go.
What We Are Monitoring Next
Going forward, the key questions are:
- Can price hold above the breakout zone?
- Will momentum continue to build above current levels?
- How does price behave as it approaches the 47.50 region?
A clean approach into that level may lead to:
- A reaction (pause or pullback), or
- A continuation if momentum remains strong
Final Thoughts
IRDM is a good example of how markets transition from consolidation into expansion. The saucer formation provides a structured framework, while the breakout confirms the shift in sentiment.
At this stage, the focus is less about predicting the exact top, and more about managing the position effectively as the trend develops.
Disclaimer:
This content is for educational purposes only and reflects how we interpret price action and market structure. It does not constitute investment advice or a recommendation to buy or sell any financial instrument. Always conduct your own research and apply proper risk management.
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