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Qualcomm Sending Strong Signal

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Shaping up for super-solid, no-frills quarter.

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Advanced Energy, Amdocs, Baidu.com, Citrix, F5, Mellanox, MEMC, Netgear, Omniture, Qualcomm, Teradyne

We're still seeing some harsh treatment for the vast majority of tech shares in post-reporting action. However, a few seem to have had poor/muted numbers or are fully priced-in.

Yahoo (YHOO): Bucked the selling, but I think that's due to hopes and dreams of yet another bid. As I stated yesterday, I felt it was priced to miss, but I was actually wanting more of a reaction in either direction. Either take them into the teens so I can get longer, or push them higher so I can take my trade. But the market seldom conforms to anyones' plans.

Now, onto the names:

Advanced Energy (AEIS) and Teradyne (TER): Both are in the semi-cap space, and I want to increase exposure to various semi-cap names. I'm currently trying to pare down a long list that has both these names on it.

I like Advanced Energy's exposure to newer growth markets such as data storage and solar, as well as Teradyne's ability to acquire and integrate assets with skillful execution over the last few years. Maybe one or both will comply with a nice pullback.

Baidu.com (BIDU): Is it Google (GOOG) or Intuitive Surgical (ISRG)? I don't know - but if I had to toss a coin, I'd lead towards Intuitive. However, I've only played Baidu long and on abject panic or when the market detested its shares. The current level is too rich for my blood.

Good luck to the brave longs - the good news is that the stock has developed a nice base to spring from over the last couple months, and could have a crushing good quarter.

Citrix (CTXS): I flat-out want the stock lower so I can buy them cheaper; I could care less what it guides for a quarter from now. A stock price should be more than next quarter's guide, and at some point the market will see the light.

Longer term, my fair value number is much higher than current levels on Citrix.

MEMC (WFR): There are a whole lot of concerns about Spain, the U.S. tax credits and forward polysilicon pricing. I'm taking a rare pre-EPS flyer here with a net long position going into the report. Defined risk, but I think that, like Yahoo, a lot of negativity may be priced in at current levels.

A few analysts have lately expressed similar thoughts - and I hope they're correct. However, I feel MEMC is well positioned, and materially lower levels will have me in a longer term position.

Qualcomm (QCOM): My second favorite name in the communications integrated-circuit chip space. I think the company will deliver the usual super-solid, no-frills quarter. However, it also rarely offer blow-out guidance. We've also seen some cautious commentary from various providers. So it's smartphone strength versus slowing legacy cellphone products.

This is another name I would like to add to on a pullback, and prices even a couple points lower would be quite attractive. The stock has dropped $5 in the last couple weeks, after some bullish analyst commentary pushed it to $48.

Frankly, Qualcomm is an easier long-term call, as many current disputes will get settled and the stock will then more properly reflect the fundamental value, which I think is substantially higher.
Position in WFR, YHOO, QCOM

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