Former Long Position - QCOM
Action number references are to actions shown
on the Action History Chart at the bottom of the page.
Step number references are to Tutorial Steps.
If you need help with terminology refer back to that Step of the Tutorial or the
FAQs associated with that Step.
We added this one to the portfolio because we like the looks of both
the Configuration and Action History charts, it has a moderate Risk Corridor,
and it looks like it is ready to break-through its recent high.
Action 1) - 8/28/05:
Step #1 - NYSE registers a Stage 3 - Bull Market.
 Step #3 -
QCOM flashes a Buy Configuration Signal
(click on Configuration
Chart, to the right). We execute the Buy. Initial Sell-Stop is established off the
valley-bottom resistance points which are below the 30wk moving average. Risk
Corridor is an acceptable 20.8% (see Action History Chart, below).
Action 2) - 9/25/05:
Step #4 - A valley-bottom at 9/2/05 is confirmed as
the third subsequent increase in price which occurs as of market close on
9/23/05. Since the 9/2 valley-bottom is above the 30wk moving average, we
adjust the Sell-Stop to the 30wk level at $37.27 rounded down to $37. From this point forward,
Sell-Stops are adjusted upward in $1 increments in tandem with the 30wk (see
Action History Chart, below).
Actions 3) through 12):
Step #4 - Sell-Stop adjustments in tandem with the 30wk moving
average (see Action History Chart, below):
3) 10/23/05: 30wk = $38.29 rounded down to $38
4) 11/13/05: 30wk = $39.22 rounded down to $39
5) 12/4/05: 30wk = $40.31 rounded down to $40
6) 12/25/05: 30wk = $41.11 rounded down to $41
7) 1/15/06: 30wk = $42.13 rounded down to $42
8) 1/29/06: 30wk = $43.06 rounded down to $43
9) 2/17/06: 30wk = $44.11 rounded down to $44
10) 3/19/06: 30wk = $45.24 rounded down to $45
11) 4/9/06: 30wk = $46.21 rounded down to $46
12) 5/7/06: 30wk = $47.22 rounded down to $47
Action 13) - 5/28/06:
Step #2 - QCOM closed at $46.03 on Friday, May 26. Since this is
below our Sell-stop level of $47 this represents a Sell-stop violation. As
this is our first Sell-stop violation with QCOM (i.e., Strike One), we
Sell half of our position. This transaction results in a gain/positive ROI of
15.5%, locking-in an annualized rate of return of 20.7% on the closed portion
of the position. Half of our original position is still alive (see Action
History Chart, below).
Action 14) - 6/11/06:
Step #2 - QCOM closed at $43.44 on Friday, June 9. Since this is
below our Sell-stop level of $47 this represents a Sell-stop violation. As
this is our second Sell-stop violation with QCOM (i.e., Strike Two), we
Sell half of our remaining position. This transaction results in a gain/positive ROI of
9.0%, which when combined with the previously closed portion, has us realizing
a locked-in annualized rate of return of 17.6% on the closed portion
of the position. One-quarter of our original position is still alive (see Action
History Chart, below).
Action 15) - 6/18/06:
Step #2 - QCOM closed at $43.95 on Friday, June 16 Since this is
below our Sell-stop level of $47 this represents a Sell-stop violation. As
this is our third Sell-stop violation with QCOM (i.e., Strike Three), we
Sell the entire balance of our remaining position. This transaction results in a gain/positive ROI of
10.3%, which when combined with the previously closed portions, has us realizing
a locked-in annualized rate of return of 16.6% on the entire former position (see Action
History Chart, below).
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