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

To: Jimbo who wrote (58667)	12/31/1999 3:41:00 PM
From: Labrador	Respond to of 152472

You have been on Mars if you don't know the remarkable story of Qualcomm (QCOM: Nasdaq), which closed December 28 at $503 and $659 the next day. This is the perfect opportunity to see whether technical analysis could have helped us identify this opportunity in advance. We ran QCOM through a series of our favorites. Alas, they would have encouraged an exit before the glorious day. This includes two forms of directional movement, Chande momentum, Parabolic SAR, relative strength, and others we have featured on this page. Candlesticks were so-so-five "rising windows" (gaps up) starting in November, but a dark cloud and a falling window on December 22-23 that might have sent the overly hasty into profit-taking mode, although they are only warnings and not full-bore reversal patterns. Two, however, would have signaled to keep the faith, assuming we were smart enough to be in QCOM in the first place. They are shown here. The first is the weekly MACD, in the top window. This indicator is favored by a number of famous technicians, including Alexander Elder and John Murphy. The weekly format gives, by definition, more of a Big Picture perspective than the daily version. (MACD stands for moving average convergence-divergence, and subtracts a long moving average from a shorter one with a still shorter moving average as a buy/sell trigger.) The histogram format makes it visually more understandable. You could sell when the slope of the histogram turns down, but you could also follow a rule that would sell only when it actually goes negative. QCOM hasn't been in negative territory since November 3, 1998. The first big hump in the histogram in late November-early December is what Elder calls an "extra-strength" buy signal, since it is so dramatic and comes in the midst of an existing rally. The other indicator that would have kept us holding QCOM is the VIDYA, which stands for "variable index dynamic average." The very smart Mr. Chande devised this measure, which varies the time period used in a moving average according to another (or several) other indicators. (I wrote about this in last week if you want a longer description.) QCOM has been above the VIDYA line since September 14, 1999 ($170.50), even though at that point the MACD was still looking a little anemic. In sum, if your had reason to buy this security to begin with-or had screening software ranking stocks by VIDYA-you could have found QCOM and would be holding it today, $476.50 per share richer. Qualcomm, AOL and Yahoo! Charts By Barbara Rockefeller Columnist 12/31/1999 7:11 AM