FTC Allegations Fail to Sink QUALCOMM, Inc. (QCOM)

QUALCOMM, Inc. (QCOM) is on the rebound after getting smacked with charges from the FTC

Jan 18, 2017 at 12:27 PM
facebook X logo linkedin


Shares of QUALCOMM, Inc. (NASDAQ:QCOM) are on the rebound, after they dropped 4% Tuesday on charges filed against the chipmaker by the Federal Trade Commission (FTC) for anti-competitive practices. Specifically, the regulatory agency said the company blocked "innovation that would offer significant consumer benefits," by creating "a tax" on competitors using similar processors. QUALCOMM responded to the allegations last night, saying the allegations are "significantly flawed." After dipping out of the gate today, however, QCOM was last seen up 1.4% at $65.07.

Analysts have been quick to chime in, with UBS cutting its price target on QCOM to $68 from $72. Elsewhere, Bernstein said the case is unlikely to cause problems in QCOM's planned purchase of NXP Semiconductors NV (NASDAQ:NXPI). Overall, the brokerage bunch has been in the stock's bullish corner, with 14 out of 23 rating QCOM a "strong buy," and only one handing out a "sell" recommendation. Plus, the 12-month consensus price target of $73.63 sits at a level the shares haven't seen in more than a year.

In the options pits, meanwhile, there are signs of growing pessimism toward QCOM. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, put buying has picked up in recent weeks, with the equity's 10-day put/call volume ratio of 0.75 seated higher than 77% of the past year's worth of readings.

What's more, QCOM's Schaeffer's put/call open interest ratio (SOIR) of 1.20 indicates put open interest outweighs call open interest among options set to expire in the next three months. Plus, the reading ranks just 1 percentage point from an annual put-skewed high. Total put open interest, meanwhile, is seated in the 98th percentile of its 12-month range,with 367,498 contracts outstanding.

From a technical standpoint, QCOM's bounce coincides with a successful test at the $64 level, which is home to the stock's 30-week moving average. Plus, the stock is fighting for a foothold atop the 120-day moving average -- which has limited pullbacks since last April, after serving as resistance through much of 2015 -- as well as a 23.6% Fibonacci retracement of QUALCOMM, Inc.'s February-through-October rally.

QCOM Daily Chart January 18

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI