QUALCOMM Stock In Focus As Earnings Approach

QCOM options traders seem to be favoring calls lately

Patrick Martin
Jul 18, 2017 at 1:03 PM
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Digital communications specialist QUALCOMM, Inc. (NASDAQ:QCOM) is set to report fiscal third-quarter earnings tomorrow, and investors are keeping their eye trained on the tech name, which has an underwhelming history in the earnings spotlight. Below, we will take a look at QUALCOMM stock's performance on the charts, and how QCOM options traders are speculating ahead of tomorrow's earnings release. 

QUALCOMM shares are currently down 0.5% to trade at $56.19, shrugging off a price-target hike to $60 from $55 at Morgan Stanley. The shares have spent most of 2017 trading between support in the $52-$53 area and resistance around $59-$60 -- home to QCOM stock's bear gap from January. Off the charts, the company has been in a drawn-out legal battle with Apple.

If past is precedent, QUALCOMM shares could be looking at another downturn. QCOM stock has dipped lower the day after earnings six of the last eight times. Following the past eight reports, QCOM stock averaged a one-day move of 5.1% in either direction. 

Looking into the options pits, traders have been picking up bullish bets over bearish at an accelerated clip. QUALCOMM stock has racked up a 50-day call/put volume ratio of 2.38 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 76th percentile of its annual range.

In the front-month series, the July 60 call is home to peak open interest of nearly 20,000 contracts, which could act as an added layer of resistance this week, should the company's earnings disappoint. In the August series, which assumes front-month status after Friday's close, the 57.50-strike call is most popular, with over 35,000 contracts outstanding. 


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