RE: QCOM Contrarian TA Opinion 4/28/00
FWIW: "On April 18, Qualcomm (QCOM - 108-7/16) reported second-quarter earnings of 26 cents per share, surpassing analysts' estimates by two cents per share...the stock has been trading sideways since the beginning of the year using the 105-110 area for support. The stock traded below the bottom of this range and hit a low at 98-1/16 the day before earnings were released. Since then, QCOM shares have continued to trade lower using their 10-day moving average for resistance (see the chart below). Today, this short-term trend line resides at the 110 mark. Coincidentally, today's intraday high on QCOM was exactly at 110, showing the continued resistance at this technical line.
"Another item of significance is the options resistance at the 110 strike. As of this morning, open interest on the May 110 call stood at 9,179 contracts. This is the site of the peak open interest within that series and across both call and put options. This strike is also seeing heavy volume today with nearly 1,201 contracts changing hands. The May 115 call is also attracting attention with 1,221 contracts trading so far today and open interest standing at 6,136.
"With this outstanding open interest and technical resistance ahead at the 110 strike, QCOM shares could continue to see weakness ahead. It will be important to note how the open interest volume from today translates into open interest on Monday. If we start seeing traders go to the bearish side amid a recovery in price action above the 110 mark, we could switch our view of the stock, becoming more bullish. However, for now the optimism in light of the stock's recent move despite better-than-expected earnings remains a slight concern."
Food for thought. Opinions? Personally, I don't follow TA too closely.
Thanks,
John |
