"As consumers continue to upgrade to high-end smartphones, they are paying more and more for each device," says Stephen Leeb.

The editor of The Complete Investor explains, "In turn, this is helping Qualcomm (QCOM), which receives licensing royalty for the average price of the phones running its chips.

"Recently reported earnings were quite impressive. Company sales rose 9.7 percent year over year to $2.95 billion, outpacing consensus estimates of $2.85 billion.

Analyst Upgrades

• Qualcomm (QCOM) was upgraded to outperform from neutral at Credit Suisse.
• JPMorgan upgraded Allegheny Tech (ATI) to overweight from neutral.
• NetApp (NTAP) was upgraded to buy from hold at Canaccord.
• Estee Lauder (EL) was upgraded to perform from underperform at Oppenheimer.
• Citigroup upgraded Suntech (STP) to hold from sell.

Qualcomm, Inc. (QCOM) closed up 3% after reiterating FY11 revenue and EPS guidance. December 48 calls are active with total call option volume of 68K contracts (30K puts). December put option implied volatility of 26 is below its 26-week average of 29 according to Track Data, suggesting decreasing price movement.

RINO International (RINO), a Chinese wastewater treatment company, was halted down $1.08 to $6.07 on news pending after canceling its Q3 conference call without specifying a new date. December 6 straddle is priced at $2.70. January is at $3.30, according to Track Data, suggesting large price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Stocks discounted a higher jobless claims release on larger issues. Many called today an extension of QE2, but it was a two-part issue. First was Bernanke issuing a defense of QE2 in in an op-ed piece and second was the note from the White House that Obama may compromise on certain Bush tax cut extensions for all income brackets.

Here were today's unofficial closing bell levels:

Dow Jones 11,434.77 +219.64 (1.96%)
S&P 500 1,221.04 +23.08 (1.93%)
Nasdaq 2,577.34 +37.07 (1.46%)

Top Analyst Calls
High P/E Stocks To Watch

Qualcomm (QCOM) is scheduled to report Q4 EPS on Nov. 3 and host an analyst meeting on Nov. 17. November option implied volatility is at 34, December and January is at 28, near its 26-week average of 29, according to Track Data, suggesting larger near-term price movement.

Transocean (RIG) is expected to report Q3 EPS on November 4. November option implied volatility is at 55, December is at 47, January is at 46, versus its 26-week average of 43, according to Track Data, suggesting larger near-term price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Qualcomm (QCOM) is scheduled to report Q4 EPS on November 3 and host an analyst meeting on November 17. November and December option implied volatility is near its 26-week average of 29, according to Track Data, suggesting non-directional price movement.

Amazon (AMZN) is expected to report Q3 earnings on October 21. November put option implied volatility is at 50, while January is at 42, versus its 26-week average of 42, according to Track Data, suggesting larger near-term price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

"Qualcomm (QCOM) is benefiting from consumers' continued love affair with mobile phones," notes growth stock specialist Stephen Leeb.

The editor of The Complete Investor explains, "The San Diego-based company licenses mobile technologies to cell phone manufacturers; its royalties rise as phone prices go up.

"In the latest quarter the company beat expectations, and going forward it forecasts strong unit sales and higher average prices as well.

Qualcomm (QCOM - option chain) shares are rising today on rumors that Apple (AAPL) has decided to use chips made by QCOM in its fifth-generation iPhone and second-generation iPad devices. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on QCOM.

QCOM opened this morning at $45.07. So far today the stock has hit a low of $44.77 and a high of $45.61. As of 12:25, QCOM is trading at $45.28 up 0.97 (2.2%). The chart for QCOM looks bullish and S&P gives QCOM a positive 4 STARS (out of 5) buy ranking.

With the merger war between Dell, Inc. (DELL) and Hewlett-Packard Company (HPQ) at last drawing to a close with the latest $33 a share offer from HP for 3par, Inc. (PAR), tech stocks have really been in focus lately. A spate of merger and acquisition action has prompted a renewed focus on information technology companies, particularly cloud computing stocks.

However, don't be fooled into thinking that a bunch of big spenders in the technology sector means that all tech picks are doing well. In fact, a number of big name blue chips in the industry continue to face very difficult roads ahead. Here are 5 blue chip tech stocks stumbling right now:

Qualcomm Inc. (QCOM) may be at a tipping point right now. And for a stock that has seen four big price gaps during 2010, the move could be a big one. The question is, will the stock gap higher or lower?

Goldman Sachs -- citing influences like a higher mix of smartphones and tablets, the move from voice-to-data-centric devices in China and India and a weaker US dollar -- recently reiterated its Conviction Buy List rating for Qualcomm and raised its price target from $44 to $46.

As Android-based smartphones continue their assault on the iPhone, QUALCOMM (QCOM) is poised to reap the spoils of war.

QUALCOMM is springing higher, challenging resistance at $36 and Goldman Sachs (GS) just put the stock on its prestigious Conviction Buy List -- citing faster smartphone growth and product cycles.

Goldman estimates that every 1% share shift into Android-based smartphones translates to $0.06 in EPS upside for QUALCOMM.

QUALCOMM's chipsets are in 80% of Android-based smartphones and the company's Android ASPs are more than double its average ASP, according to the firm.

Analyst Upgrades

• Janney Montgomery upgraded Microsoft (MSFT) to buy from neutral with a $30 price target, citing valuation and expectations for strong Q4 results.
• UBS upgraded SanDisk (SNDK) to buy from neutral based on favorable pricing and mobile design win momentum. The firm raised its target to $55 from $46.
• BMO Capital upgraded Medtronic (MDT) to outperform from market perform based on valuation and its product pipeline. The firm has a $48 price target on the stock.
• Lorillard (LO) and Qualcomm (QCOM) were upgraded to conviction buy from buy at Goldman.
• Monsanto (MON) was upgraded to buy from hold at Citigroup.
• FedEx (FDX) was upgraded to buy from hold at BB&T.

Call options have rarely been a more popular choice on Qualcomm (QCOM), according to data from the International Securities Exchange (ISE). During the past 10 days, speculators on the ISE have bought to open 39,180 calls on the equity, compared to just 6,705 puts. The stock's resulting 10-day call/put volume ratio of 5.84 reveals that nearly six times more bullish bets than bearish have been purchased during the past two weeks.

Traders' ravenous appetite for calls is a little surprising, considering Qualcomm's recent technical swoon. The shares have dropped about 25% year-to-date, and Qualcomm has underperformed the S&P 500 Index (SPX) by more than 10 percentage points during the past 40 sessions, on a relative-strength basis.

Oil Services Holders Trust (OIH) closed at $98. Crude oil futures are recently down 0.83% to $74.85 according to Bloomberg. OIH volatility increases as uncertainty regarding oil drilling mounts. OIH holdings include BHI, BJS, DO, ESV, GRP, GSF, HAL, SLB, HC, NBR, NE, NOV, RDC, RIG, SII, SLB, TDW and WFT. OIH June put option implied volatility is at 55, July is at 53; above its 26-week average of 36 according to Track Data, suggesting larger price movement.

Stocks with implied volatility above 30-day mean; Apollo Group (APOL), Qualcomm (QCOM), Boston Scientific (BSX) according to IVolatility.

CBOE Volatility Index-VIX at 30.56; 10-day moving average is 32.69, 50-day is 25.74, 200-day moving average is 23.12.

Update is by Stock Specialist Paul Foster of theflyonthewall.com

Short sellers increased their bets against tech stocks for the period ending May 28, according to data from the NYSE and NASDAQ.

The short interest in NYSE-traded tech shares AMD (AMD) and Texas Instruments (TXN) were up sharply. The short interest in AMD was up 19% to 61.6 million shares. Share short in TXN rose 27% to 27.9 million.

Among NASDAQ-traded stocks, the short interest in Intel (INTC) rose 36% to 61.3 million. Shares short in Broadcom (BRCM) were up 41% to 15.9 million. The short interest in Qualcomm (QCOM), Micron (MU), and Seagate (STX) also rose.

Tech shares with falling short interest included Microsoft (MSFT), down 14% to 57 million and Dell (DELL) down 14% to 45.3 million.