NEW CALL PLAYS
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QCOM - Qualcomm Inc. $162.06 -17.25 (-14.06 this week)
QUALCOMM Incorporated is a leader in developing and delivering
innovative digital wireless communications products and services
based on the Company's CDMA digital technology. The Company's
major business areas include CDMA phones; integrated CDMA
chipsets and system software; technology licensing; and
satellite-based systems including OmniTRACS® and portions of
the Globalstar(TM) system. Headquartered in San Diego, Calif.,
QUALCOMM is included in the S&P 500 Index and is a 1999 FORTUNE
500® company traded on the Nasdaq under the ticker symbol QCOM.
It's back! After a one-week absence from our play list, QCOM
has returned. It's hard to pass up playing this company. That
would be like not playing YHOO in 1998, DELL in 1997, INTC in
1996 or MSFT in any given year. It is defining the new market
valuations and is the first stock most of us look to in the
morning for a potential play. But why now you may ask? Well,
there are a lot of reasons. First of which is their earnings
report due out on Jan 19th (confirmed). Second is the strength
it showed by holding support at $160. This looks like an entry
point. It has been holding this level on weakness since last
Thursday. If the market didn't get the selling out of its
system today, the 10-dma at $147 may be the next possible entry
point. Another reason for listing QCOM calls at this time is
the split, believe it or not. We usually don't recommend
holding over a split due to the post-split depression, but QCOM
has shown little weakness. This is part of the new dynamic
taking place. QCOM was literally so high in the $600 to $700
range that it was unplayable to the average stock investor.
Now that it has split and is ONLY $160, retail investors are
able to buy the stock. This may account for some of the support
at $160. The volume was relatively light on today's pullback
too, which is always a plus. The key will be to see if the
markets and QCOM will recover, and will it be on good volume.
Remember, it doesn't get much more HIGH-RISK than this so use
caution and monitor the play. This isn't the kind of stock
that I like to open a position on and head out for a round of
golf.
Other interesting strategies for profiting on QCOM would be to
sell uncovered puts. This will eat up some margin and carries
increased risk, but the premiums are ripe and time is in your
favor. Besides, most investors would mind owning some QCOM
even if it is put to you.
BUY CALL JAN-155 AUA-AK OI=1993 at $20.88 SL=16.25
BUY CALL JAN-160*AUA-AL OI= N/A at $18.75 SL=14.00
BUY CALL JAN-165 AUA-AM OI=1862 at $16.50 SL=12.50
SELL PUT JAN-145 AUA-MI OI=2741 at $ 6.75 SL= 9.00
(See risks of selling puts in play legend)
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