Put Buyers Pounce as QUALCOMM, Inc. (QCOM) Gets Smacked

QUALCOMM, Inc. (QCOM) is following its fellow tech peers into the red today

Mar 26, 2015 at 10:43 AM
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QUALCOMM, Inc. (NASDAQ:QCOM) is feeling the heat in today's trading, as tech names continue to sell-off. At last check, the shares were down 1.3% at $66.34 -- despite BMO upping its price target to $86 from $85 -- widening their week-to-date deficit to 5.3%. Options traders are responding in kind, scooping up puts at a rate two times the average intraday pace, with a number of speculators calling for more downside through tomorrow's close.

Specifically, QCOM's weekly 3/27 66-strike put has seen the most action, and it seems safe to assume new positions are being purchased here -- a theory echoed by data from the International Securities Exchange (ISE). By buying the puts to open, traders expect the stock breach $66 by tomorrow's close, when the weekly series expires. Earlier, the security bottomed out at an intraday low of $65.68.

Outside of the options pits, sentiment is more optimistic. For starters, although short interest jumped 20.3% in the last two reporting periods, it accounts for just 1.2% of the equity's available float. This leaves little in the way of sideline cash available to help fuel any future rally attempts.

Elsewhere, more than two-thirds of covering analysts maintain a "buy" or better rating toward QUALCOMM, Inc. (NASDAQ:QCOM), with not a single "sell" to be found. Plus, the consensus 12-month price target of $76.88 stands at a 16% premium to current trading levels. Should the shares extend their downward trajectory, a continued rise in short selling and/or an unwinding of optimism among the brokerage bunch could translate into a fresh wave of selling pressure.


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