QCOM Topples Key Trendline After Bull Note

The brokerage sees profit growth for QCOM as it ramps up its 5G chip production

Deputy Editor
Sep 28, 2020 at 9:38 AM
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The shares of chipmaker Qualcomm, Inc. (NASDAQ:QCOM) are up 1.9% at $116.70 this morning, pacing for their third-consecutive gain, on a price-target hike from Citigroup to $132 from $108. The brokerage forecast profit growth from its accelerated 5G chip production, and added that any handset share shift from China's Huwawei, due to trade restrictions, will benefit QCOM, which supplies major handset makers Apple, Vivo, and Samsung. 

On the charts, QCOM has tried to make another run at its Sept. 2, all-time high $123.92. While pressure at the 20-day moving average has emerged overhead during the past couple weeks, the equity is set to knock out this moving average today. Plus, it looks like the $110 mark has formed a new floor for the security. For the year, QCOM is up nearly 50%. 

The majority of analysts were already bullish on QCOM coming into today, with 14 in coverage calling it a "buy" or better. There are still a few holdouts, however, with six calling the chip stock a "hold," and one saying "strong sell." The consensus 12-month price target of $123.75, meanwhile, is at an 8.1% premium to Friday's close. 

The options pits are echoing this optimism. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), QCOM sports a 50-day call/put volume ratio of 5, which stands higher than 91% of readings from the past year. This suggests a much healthier-than-usual appetite for long calls of late. 

 


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