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Trade of the Day: QUALCOMM, Inc. (QCOM)

QCOM failed at resistance after a big downgrade

By John Jagerson and Wade Hansen, Editors, SlingShot Trader

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Fake-outs continue in the market, which is leading us to add a bearish trade to our positions as uncertainty rises. QUALCOMM, Inc. (NASDAQ:QCOM) got a big downgrade on Monday, and near-term prospects are pointing towards continued deterioration in the company’s margins.

We like the potential for a big downside move in the short term after resistance in the $62 range has been retested and the stock failed to break higher. In the short-term, we expect to see prices in the $50 range now that the news catalyst that drove it higher in November — Broadcom Ltd (NASDAQ:AVGO)’s buyout — is a much, much lower probability.

‘Buy to open’ the QCOM May 57.50 Put (QCOM180518P00057500) for a maximum price of $2.65.

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.

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