Remember that rosy analyst outlook for QUALCOMM I detailed in Option Activity Alert on September 5? At the time, Zacks reported that 15 of the 18 analysts covering the shares rated them a buy or better. Well, you can knock one of those buy ratings from its lofty peak as of today. American Technology Research downgraded the stock to neutral today, after having held a buy rating on QCOM since April 2004. The company cited a shift away from the company's products by key customer Motorola (MOT). It seems that MOT is going with Texas Instruments (TXN) as the supplier of choice for its new 3G phones.

Technically speaking, since being rejected once again at the round-number 40 level on September 4, QCOM has dropped some 4%, and is now testing key support at the 37 level. With sentiment starting to unwind, as evidenced by today's downgrade, I wouldn't be surprised by a move to the 35 level by QCOM. Should the shares breach this last bastion of long-term support, it could be a long, hard winter for the security.