QUALCOMM Inc. (NASDAQ:QCOM) — This company is a leader in developing products and services based on its advanced wireless broadband technology. Its stock performance had been outstanding until it was hit with a shortage of chips from Japan. That and profit-taking drove the stock from its March high of over $68 to under its 200-day moving average in June.
On July 24, the Trade of the Day said: “[QCOM] appears to have found support at a quadruple-bottom just under $54, where five sessions ago, it reversed with a breakaway gap… Long-term buyers should add this premier tech stock to their portfolio now, and traders should expect a rebound to $63 to $65.”
On Wednesday, QCOM was included in a list of stocks that had increased their short interest by more than 9% from Aug. 15 to Aug. 31. And Thursday’s rally drove the stock to the lower end of our target at $63. But with such a high short interest, some of the gains were likely the result of short-covering.
This could continue for another day or so and is a great opportunity for traders to nail down a nice profit. Sell now or target the gap in April at $64.85 to $66.54. Long-term buyers should consider selling options in order to protect profits. Support is at $61.