Qualcomm Inc (QCOM)

[khemara_qc]

Qualcomm's Cup Runneth
Ben Berentson, 05.20.04, 12:36 PM ET

NEW YORK - The market is oversold "at levels we haven't seen since the deepest, most depressing part of the last bear market," according to Dan Zanger, the editor of the Zanger Report technical analysis service.

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Zanger is looking for seasonal forces and these technical factors to drive the market up in June and July: "After a big May fall, June is often a very strong month and stocks tend to rally into earnings season." So which stock does Zanger thing is best-positioned to take advantage of this bounce? He likes Qualcomm (nasdaq: QCOM - news - people ), which owns the CDMA wireless technology used by cellular phone companies like Verizon (nyse: VZ - news - people ) and Sprint (nyse: FON - news - people ). Over the past 12 months, QCOM earned $1.3 billion on revenues of $4.3 billion. The stock has been locked in a solid uptrend for the past year and has more than doubled in that time. It currently trades for around $64.50 a share.


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Zanger thinks this is the perfect time to buy Qualcomm. He says it is in the process of making a cup and handle pattern, and investors have a chance to buy in at the bottom of the cup. "Qualcomm hasn't broken down like the rest of the markets--it's stayed strong and shown good relative strength," Zanger adds. He thinks investors should buy if QCOM breaks above $66 on heavy volume--as a sign that it is heading towards completing the cup. The successful completing of the right side of the cup could take the stock to $69 in the short-term, but a successful breakout off of the handle would push the stock to $80 within a few months.

http://www.forbes.com/investmentnewsletters/2004/05/20/cz_bb_0520chartroom.html?partner=yahoo&re...