QCOM Stock on Confirmed Uptrend

Oct 2nd, 2020 QCOM Stock on Confirmed Uptrend Dear Reader, Yesterday, we looked at a Daily Price Chart of Kura Oncology, Inc., noting the stock has been making a series of 52-week highs. For today's Trade of the Day we will be looking at an On Balance Volume chart for Qualcomm Inc. stock symbol: QCOM. Before breaking down QCOM's OBV chart let's first review which products and services are offered by the company. Qualcomm Incorporated designs, develops, manufactures, and markets digital communication products worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). Confirming a Price Uptrend with OBV The QCOM daily price chart below shows that QCOM is in a price uptrend as the current price is above the price QCOM traded at six months ago (circled). The On Balance Volume chart is below the daily chart. On Balance Volume measures volume flow with a single Easy-to-Read Line. Volume flow precedes price movement and helps sustain the price uptrend. When a stock closes up, volume is added to the line. When a stock closes down, volume is subtracted from the line. A cumulative total of these additions and subtractions form the OBV line. On Balance Volume Indicator ● When Close is Up, Volume is Added ● When Close is Down, Volume is Subtracted ● A Cumulative Total of Additions and Subtractions form the OBV Line Volume flow precedes price and is the key to measuring the validity and sustainability of a price trend. We can see from the OBV chart below that the On Balance Volume line for QCOM is sloping up. An up-sloping line indicates that the volume is heavier on up days and buying pressure is exceeding selling pressure . Buying pressure must continue to exceed selling pressure in order to sustain a price uptrend. So, On Balance Volume is a simple indicator to use that confirms the price uptrend and its sustainability. The numerical value of the On Balance Volume line is not important. We simply want to see an up-sloping line to confirm a price up trend. 110.7% Profit Potential for QCOM Option Now, since QCOM's OBV line is sloping up this means the stock's bullish rally will likely continue. Let's use the Hughes Optioneering calculator to look at the potential returns for an QCOM call option purchase. The Call Option Calculator will calculate the profit/loss potential for a call option trade based on the price change of the underlying stock/ETF at option expiration in this example from a flat QCOM price to a 12.5% increase. The Optioneering Team uses the 1% Rule to select an option strike price with a higher percentage of winning trades. In the following QCOM option example, we used the 1% Rule to select the QCOM option strike price but out of fairness to our paid option service subscribers we don't list the strike price used in the profit/loss calculation. Our initial price target for QCOM stock is 132.30 per share. Big Profits Are Possible for Any Trader You don't need to be a seasoned professional in order to make big profits in the stock market. Everybody has the opportunity to potentially make big bucks in the market. Whether you're a beginner or a pro, my book can give you the keys to trading success. Click here for your eBook. When you use the 1% Rule to select an QCOM in-the-money option strike price, QCOM stock only has to increase 1% for the option to breakeven and start profiting! Remember, if you purchase an at-the-money or out-of-the-money call option and the underlying stock closes flat at option expiration it will result in a 100% loss for your option trade! In this example, if QCOM stock is flat at 119.40 at option expiration, it will only result in a 11.2% loss for the QCOM option compared to a 100% loss for an at-the-money or out-of-the-money call option. Using the 1% Rule to select an option strike price will result in a higher percentage of winning trades compared to at-the-money or out-of-the-money call options. This higher accuracy can give you the discipline needed to become a successful option trader and can help avoid 100% losses when trading options. The goal of this example is to demonstrate the powerful profit potential available from trading options compared to stocks. The prices and returns represented below were calculated based on the current stock and option pricing for QCOM on 10/1/2020 before commissions. When you purchase a call option, there is no limit on the profit potential of the call if the underlying stock continues to move up in price. For this specific call option, the calculator analysis below reveals if QCOM stock increases 5.0% at option expiration to 125.37 (circled), the call option would make 45.3% before commission. If QCOM stock increases 10.0% at option expiration to 131.34 (circled), the call option would make 101.7% before commission and outperform the stock return over 10 to 1. And if QCOM stock increases to our initial price target of 132.30 at option expiration the call option would make 110.7% before commission. The leverage provided by call options allows you to maximize potential returns on bullish stocks. The Hughes Optioneering Team is here to help you identify winning trades just like this one. Interested in accessing the Optioneering Calculators? Join one of Chuck's Trading Services for unlimited access! The Optioneering Team has option calculators for six different option strategies that allow you to calculate the profit potential for an option trade before you take the trade. Get Trades from the Champion ! Market guru Chuck Hughes has used his strategies to win 10 Trading Championships. Now he wants to share these same strategies with you! Chuck is offering special pricing for his Weekly Option Alert Trading Service for Trade of the Day subscribers. You can start receiving Chuck's secret strategies and hand-picked trades today! Just call Brad at 1-866-661-5664 or 1-310-647-5664 to join and use the code "Optioneering VIP" to receive special pricing! Click here for more details. Wishing You the Best in Investing Success, Chuck Hughes Editor, Trade of The Day Have any questions? Email us at dailytrade@chuckstod.com Chuck Doesn't Fear Market Turbulence... Chuck Hughes doesn't shy away from market volatility, he welcomes it. Chuck's used to turbulence. His years as a pilot gave him the the ability to weather even the worst storms. He has a tested and proven secret strategy that thrives during turbulent market conditions. For more information click here. Unsubscribe Investment Software Inc 22C New Leicester Hwy #117 © 2020 Tradewins Publishing. All rights reserved. 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