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You’ll pardon me, I hope, if I’m nervous heading into Qualcomm’s (QCOM) earnings announcement for the second quarter of fiscal 2010 on Wednesday, April 21. Last quarter Qualcomm shares dropped 14.3%–or $6.72 a share–on January 28, the day after the company released earnings for the first quarter of the 2010 fiscal year and announced guidance for future quarters. In its guidance Qualcomm executives predicted lower than expected revenue and earnings for the second quarter.

Since then the company has restored most of the decrease it predicted three months ago. But Qualcomm has a record of delivering earnings surprises—and the surprises aren’t always pleasant.

But that’s not the reason I’m selling these shares. My read of the technology sector shows that cell phone selling prices—and hence the selling prices for the things that go into cell phones such as Qualcomm’s chips—will remain under pressure well into 2011. (This isn’t to say that cell phone prices will increase in 2011. It’s just that I don’t see prices breaking their downward trend before that.) That will keep pressure on margins for just about every company in the sector.

On the other hand, I see margins improving in other parts of the technology sector. Intel (INTC), for example, raised its forecast for gross margins for 2010 to a range of 62% to 66% in the guidance to its first quarter earnings. (Intel is already a member of the Jubak’s Picks portfolio. For more on Intel’s recent earnings report see my post )

And that means I think you can find better technology stocks than Qualcomm to buy right now. So I’m selling this position with an 8.1% loss since I added it to Jubak’s Picks on July 15, 2009. I’ll have a new technology buy to replace Qualcomm tomorrow.

 Full disclosure: I will sell my personal position in Qualcomm three days after this is posted.