Quest held last weeks bounce like it was defending the Alamo but the market weakness on Thr/Fri was just too much to bear. Quest dipped to our entry target of $91 on Friday. DGX came to rest on the 100-day average at $90 at Friday's close and has even stronger support at the 200 day average at $87. We have an $85 insurance put and I am placing the stop loss at $85, -$2 under the 200 day. This average has held on both dips over the last year. If stopped close only the LEAP Call. Keep the insurance put.
Quest Diagnostics Incorporated is the nation's leading provider of diagnostic testing, information and services, providing insights that enable healthcare professionals to make decisions that improve health. The company offers the broadest access to diagnostic testing services through its national network of laboratories and patient service centers, and provides interpretive consultation through its extensive medical and scientific staff.
Quest Diagnostics is also the leading provider of esoteric testing, including gene-based medical testing, and provides advanced information technology solutions to improve patient care. (Source DGX)
2006 $95 LEAP Call YFK-AS 50 cents.
Entry $91.00 (01/21)
PLAY: QCOM - Qualcomm $37.80 ** No Stop Loss **
Our target on QCOM was $41 and we came very close on Wednesday but never touched during market hours. The gap down on Thursday provided everyone with a great entry point with one exception. The insurance put I chose for this play was the April $40 at $1.50. The gap open below $40 sent that put into orbit with a jump to $3.00. The good news is that it has retained its value and is still over that level. It was offset by the drop in the LEAP to $3.20 from the $4.40 we saw last Sunday.
In our current position with the Put in the money we are very well protected with a total cost of entry only slightly above the $5.90 we were looking at last Sunday. I think this is about as good as it gets with our April put and plenty of time to run. I am going to set a stop on the put at $40 to prevent a complete giveback if QCOM suddenly finds traction. Since our LEAP will also escalate we should not lose much if the put is stopped.
QCOM closed Friday at $37.80, which is exactly the 200 day average and it should be strong support.
Qualcomm is a leading technology provider for wireless communications and pioneered the CDMA standard used in many phones today.
There was a symbol error last week on the Leap.
2006 $42.50 LEAP Call WLU-AV $3.00
Stop Loss on Put QCOM at $40.00
Entry $38.00 (01/20)