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Strategies & Market Trends : The Options Box -- Ignore unavailable to you. Want to Upgrade?

To: Jill who wrote (1107)	6/1/2000 7:48:00 PM
From: solihull	Read Replies (2) \| Respond to of 10876

Jill, The Q-pain revisited, plus voodoo: "Cellular telephone equipment maker Qualcomm (QCOM - 69) has had quite a roller coaster ride this week. Reports last week that QCOM's CDMA technology had lost favor with Chinese officials put pressure on the stock. That culminated in what may turn out to be a selling climax on Tuesday. QCOM traded as low as 60 on Tuesday before rallying to close at 76-3/8 on volume of over 57 million shares. This key reversal day, when a new low is made but the stock reverses to close at its high for the day, is often the mark of a turning point from which a stock can rally. From its near-term intraday high on March 29 to its recent intraday low on Tuesday, the security lost 63 percent of its value. During this decline, this laggard encountered stingy overhead resistance from both its 10-day and 20-day moving averages. Interestingly, 60 is also the site of the equity's 20-month moving average, and Tuesday's rally followed a perfect test of this support. Yesterday and today, however, QCOM fell below 70 and has struggled trying to retake this technically significant mark. "QCOM's options configuration suggests that more time may pass before the equity is able to mount a significant rally. The preponderance of options speculators who are buying calls on a stock that has continued to be in a downtrend has been misguided thus far. Once speculators begin to "throw in the towel" and buy puts, this could signal a bottom might be in place. "Additionally, QCOM has significant front-month overhead call open interest at the 70 strike. In the short term, this may serve to resist the advance of QCOM, at least until expiration passes. Currently, the open interest at the July strikes is lower, though the July 75 call already has over 9,000 contracts of open interest." Patience here should be well rewarded. Kind regards, John