Minyanville's Before The Bell: Qualcomm, Subprime Slime, Futures Point Higher
Qualcomm is on the bubble. Subprime slime continues. Futures still point up.
Qualcomm (QCOM) may be in for a fight as Nokia (NOK), the largest mobile-phone maker, attempts to persuade a U.S. judge that its mobile phones do not use some of Qualcomm's patents. Revenues of Qualcomm's patent-licensing business that provided 76% of operating profit last year are at stake.
Analysts suspect that Qualcomm may have to make concessions with Nokia that could prompt other handset makers to demand price cuts. (From Bloomberg) Professor Udall first asked if Qualcomm's stock was too expensive in Thoughts On The Tape: Sun Microsystems, Qualcomm, Apple
The Bull Pen: Buyers may want to set a stop below $41.25 (200-day) or, for those with a bit more risk appetite, the 50-day moving average at $40.
The Bear Cave: The sentiment is on the bear side as the stock is offered lower in premarket trading. Those looking to short this name can set a stop above $43.50, which is the recent October high.
Caveat: This court ruling, which is scheduled for next month, may lead to a gap higher or lower (a "binary" outcome) which will render overnight technical stop levels obsolete.
U.S. home foreclosures doubled in September from a year earlier to 223,538 in a report by RealtyTrac. California and Florida led the nation as the top two states with the most foreclosures. (From Bloomberg) The report coincides with a story by the Wall Street Journal that stated more than $1.5 trillion in high-interest-rate loans were made when home prices peaked between 2004-2006. Of those loans, many were made to borrowers in the subprime category. Read Professor Zucchi's The Recent History And Future of Housing. Also please view Minyanville's Subprime Package for more on the housing crisis.
The Bull Pen: We mentioned yesterday contrarian investors could look to Meritage Homes (MTH) for a short-term opportunity (sell-stop below $14.00). Ryland (RYL) still remains in play with its potential reverse head & shoulders pattern (bullish) as it continues to sit above the $24 level (defined risk)
The Bear Cave: The Philadelphia Housing Sector Index (HGX) will offer the best short-side set-up near the $185 level should traders choose to "fade" (read: sell) the recent rally. It should also be noted that the HGX, with the sideways action under that level, is a classic "churn" under resistance.
Have a look at Minyanville's Stocks To Watch for more company-specific ideas.
A Quick Check Around the World
Asian markets finished strong for a second consecutive day. Hong Kong's Hang Seng finished up +1.97%, the Nikkei added +1.64%, Taiwan gained +0.60%. India's Sensex gained +0.84%%, and Shanghai closed up +2.46%
Markets are trading higher in Europe and U.S. equity futures are also higher as of 8:00 AM EST with S&P futures up 8.9 points and Nasdaq futures up 11.5 points.
A Look At Commodities
Crude is up +0.71 to 82.01 and gold is strong, up +5.5 up 751.5. Silver is higher by +0.11 to 13.79 and Copper is also higher +1.65 to 371.05.
On The Radar
Below is a list of events for today's trading session. Investors will have plenty to digest. Click here to see Minyanville's full Trading Radar.
8:30 Export Prices ex-ag: 0.1% prior
8:30 Import Prices ex-oil: 0.1% prior
8:30 Initial Claims: 317 k prior
8:30 Trade Balance: -$59.0 bln cons
10:30 Crude Inventories: 1138 k prior
2:00 Tresasury Budget: $100.0 bln cons
It's Thursday folks! Good luck and have a great day!
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