Monday, April 20, 2009

Weekly Stock Pick

Buy Sell Hold

The Week Ahead

As I’m running my Monday morning technical stock scan looking for low-risk high-reward trade opportunities, I’m looking at the week ahead. Corporate earnings reports from the banking, pharmaceutical, consumer products, technology and industrial companies are coming this week along with durable goods orders and existing home sales. Friday the Fed will release the stress tests for the banking industry, and the IMF will be meeting this weekend. I hear more shorts coming into the market now, and I hear the rally still has legs. Could be a week for big moves up or down.

My Stock Pick This Week

I’m shorting a communications company whose shares have risen sharply ahead of their quarterly report coming out soon. This wireless comm. Company is expected to give a cautious outlook when they report March quarter results which should give investors little reason to push shares higher. Some analysts argue that, if shareholders don’t take profits here, futures conditions could improve in the second half of 2009 resulting in more gains longer term. So using stop-loss is always the rule of thumb in any market, especially now. I’m betting it’s down again first before its up again later. In case I’m wrong, I’m out with a small loss.

Short-Sell Qualcomm Communications – Ticker QCOM

Sell-Entry: 40.74 to 43.20

Stop-Loss: 44 or Higher

Take Profit Areas: 39.48, 38.22, 36.96,

Qualcomm Company Profile

Qualcomm Incorporated designs, manufactures, and markets digital wireless telecommunications products and services based on its code division multiple access (CDMA) technology and other technologies. The company operates in four segments: Qualcomm code division multiple access technologies (QCT), Qualcomm Technology Licensing (QTL), Qualcomm Wireless and Internet (QWI), and Qualcomm Strategic Initiatives (QSI). QCT segment develops and supplies CDMA-based integrated circuits and system software for wireless voice and data communications and multimedia functions, as well as global positioning system products used in wireless devices, including mobile phones, data cards, and infrastructure equipment. QTL segment grants licenses to use portions of its intellectual property portfolio comprising patent rights useful in the manufacture and sale of certain wireless products, such as products implementing cdmaOne, CDMA2000, WCDMA, CDMA TDD, and/or OFDMA standards and their derivatives. QWI segment sells equipment, software, and services used by transportation and other companies to connect wirelessly with their assets, products, and workforce; and products that operate on the Globalstar low-Earth-orbit satellite-based telecommunications system. It also provides BREW-based products that include user interface, and content delivery and management products and services for the wireless industry; QChat that enables instantaneous push-to-talk functionality on CDMA-based wireless devices; development, hardware, and analytical expertise involving wireless communications technologies to United States government agencies; and an application embedded on select wireless devices, which enables financial institutions and merchants to deliver branded services to consumers through the mobile devices. QSI segment makes strategic investments to promote the worldwide adoption of CDMA-based products and services. The company was founded in 1985 and is based in San Diego, California.

Click here to review and Trial the Trading Software I used in determining my short position on Qualcomm.

Click the Qualcomm Stock Chart for a larger view.

Qualcomm Stock Chart