To OTC Journal Members:
 

Two Trading Alerts For A Potential Market Surge

If you are looking for something to watch besides coverage of the war, today we offer up two trading ideas which should do well if and when the market surges to the upside.

In this past weekend's edition, we put forth the case the market would repeat the "V" bottom formation we have seen four times since March of 2000. Click Here to read that edition.

Despite clear evidence the war will not go as quickly as the market anticipated last week, we have only given back 1/3 of last week's meteoric gains on very light volume. If the "V" bottom pattern is repeated, we have only experienced the front end of this bear market rally, and there could be another 250 points to go on the NASDAQ and another 1000 points on the DOW.

Despite tough sledding in the microcap arena over the last six months, the OTC Journal has notched some spectacular gains in larger cap stock ideas. Here are some of the stocks we have featured since last October that have done extremely well:

• 12/2-ERES at $14.87- Now $26.50 
• 10/12- AMD at $3.76- Now $6.53
• 10/12- CMVT at $7.11- Now $11.95
• 10/12- QLGC at $21.86- Now $39.50

Pay very close attention to the Stop Loss levels, as the is the most important component of these ideas. Bad news from the war front could send stocks careening down and you don't want to be in trading situations. Just take your small loss and wait for the market to stabilize on support. If it happens we'll be back with more ideas.
 

Qualcomm Inc (NASDAQ: QCOM)

Qualcomm is the widely held wireless technology company that provides the wireless operating system and chips which run millions of wireless devices world wide.

Qualcomm has retraced about 40% of last week's meteoric gains, and has pulled back into the mid range of support, as depicted in the blue lines in the chart.

Qualcomm's growth continues to defy all the "experts" who say the company has seen its peak. For the December quarter, revenues rose 57% to $1.1 billion and net income increased 73% to $241.3 million.

Qualcomm was one of the first companies to jump on Bush's dividend bandwagon. This year the company announced they would be paying an annual dividend of $.20 per share. It's a nice gesture and demonstrates the company is making real cash profits, but you would never own this stock for yield.

If the market charges ahead after a couple days of sideways grinding, we believe Qualcomm could break through the $40 resistance level. Here are your parameters for this trading alert:

• Buy QCOM at $38.75 or better.
• Price targets: $39, then $40, then $42 on a breakout short term
• Stop Loss- Very Tight- $38 (minimize the risk if the war goes poorly)

Adobe Systems (NASDAQ: ADBE)

Publishing software specialist Adobe Systems streaked up the charts in the March rally. The stock notched an eight point gain from the early March low of $26 to a week later high of $34.

The stock has since retreated back to about $32, and is taking a low volume breather on support.

The chart is notable and bullish because the stock retreated to the top of the March 13th gap, took a look over the cliff, and then turned around and headed back up. This suggests the stock does not want to fill this gap in the immediate future.

Here are the parameters for this Trading Alert:

• Buy ADBE under $32.
• Price Targets: $34, then potentially higher
• Stop Loss: $31.50 (very tight)

Trading Strategies

You should be able to enter both of these ideas in the morning if we get a quiet open. If the market gaps down on bad news from the war, stay away and wait for the smoke to clear.

If the market gaps up, wait for a pullback to catch the right entry levels. If it never comes, don't worry. There will be more ideas setting up with good entry levels.

If you are holding these positions overnight, and the market gaps down below the stop losses, wait for a short term morning rally to lock in your small loss and move on. 

In both stocks you can trade buy call options instead of the common stock for more leverage, but there is correspondingly more risk.

Please email your comments on this edition for the Members' Forum. info@otcjournal.com. 

Click Here to view our compensation on every company we have ever covered, or visit the following web address:  http://www.otcjournal.com/disclaimer.html for our full profiles and http://www.otcjournal.com/trading-alerts/disclaimer.html for Trading Alerts.

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