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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (53587)	12/12/1999 3:10:00 AM
From: Ruffian	Read Replies (2) \| Respond to of 152472

Option Investor> QCOM - Qualcomm Inc. $391.50 (+7.06)(-0.31)(+17.69)(-10.94) 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. This isn't a complaint. In fact, it's just the opposite. Despite a $7.06 gain this week, QCOM has been consolidating nicely in the current ascending pennant range on anemic volume. It has not exceeded it ADV in the last 15 trading days. That's a good thing and gives the stock a breather before its next ascent. How can that be good? If you connect the lows (or pullbacks) on the chart since mid-November, you will have an ascending line, or the lower border of the pennant. It means there are fewer sellers at these levels, and buyers gladly move in on every successfully higher dip. Connecting the resistance points should give a flat line (roughly) in the $390-$405 range. As the lows (support) get higher to converge with resistance, you get the pennant formation. If it's ascending, you usually get the breakout to the upside, which we expect to happen with QCOM. The catalyst? The December 20 shareholder meeting wherein we expect approval of a share reauthorization plan, which will enable the 4:1 split to occur shortly thereafter. QCOM could also announce the sale of its handset business, which it has said it would like to sell by year-end. That would swell the volume and thus the price back up. If that were going to happen, we'd expect to see the move this week in anticipation of the meeting. Volume will be the key. Short-term support is $380-$385, but Friday's strong close may keep it over $390 from here. Target shoot to your level of comfort. A major breakout occurs when the volume moves up and takes the price over its all-time high of $407.50. Of course, if the market does its best imitation of a submarine, QCOM will be under water too. So keep your stops set just in case. December strike time decay will really be working against call buyers this week. The ATM DEC strikes still have roughly $13 of time value and the ATMs have $10 of time value. We don't recommend their purchase. However, a covered call writer (seller) can still earn 3.2% on the ATMs if called out in the next five days so long as QCOM remains above $390. Naked put sellers can do equally well, but this carries a bit more risk if you are not careful. Buying anything past January is inherently more expensive, so we offer only January strikes this week. BUY CALL JAN-380 AAF-AP OI=1232 at $46.00 SL=36.00 BUY CALL JAN-390*AAF-AX OI=1103 at $43.13 SL=33.50 BUY CALL JAN-400 AAF-AY OI=7011 at $38.75 SL=30.25 SELL PUT DEC-370 AAF-XN OI=1607 at $ 4.00 SL=6.25 (See risks of selling puts in play legend) Picked on Nov 16th at $330.00 P/E = 319 Change since picked +61.50 52-week high=$406.13 Analysts Ratings 6-8-4-0-0 52-week low =$ 24.50 Last earnings 11/99 est= 0.88 actual= 0.91 Next earnings 01-19 est= 0.95 versus= 0.33 Average Daily Volume = 5.70 mln Chart = quote.yahoo.com