Looking at a weekly chart of Qualcomm (QCOM), I still see some upside potential toward the $73-to-$75 area.
With that in mind, I want to show you a pullback on the daily chart that has piqued my interest -- a decline that may offer a relatively low-risk buy entry.
There are a few things I like about this chart. First, we are looking at a nice general pattern of higher highs and higher lows, which is considered bullish. Second, Qualcomm is above both the 200-day and 50-day simple moving averages. That also suggests a strong stock. Now, this daily chart does show Qualcom coming off some key Fibonacci price-extension resistance, but that is a natural thing.
If this bullish pattern is to remain intact, Qualcomm will ideally hold above the $62.33 swing low. I'm seeing a key price support cluster above this high -- ranging between $63.45 and $64.89 -- that includes quite a few 100% or "symmetry" projections. We'll use these projections help us to get involved in the direction of the trend, comparing prior corrective declines with what I believe is a current correction.
So far a low has been made at $65.03, just above that key price cluster. This is close enough to have us start looking for a buy trigger, or an all-clear signal to enter the stock -- though we may also see a bit deeper downside correction into the listed zone.
If you do take a trigger on a 15- or 30-minute chart for an entry, you may want to give this one a little room: Place the stop either below the low end of the price cluster zone, or below the $62.33 swing low. As far as a target is concerned, I would like to shoot for the weekly target up at the $73-to-$75 area. If we don't see any triggers for an entry and Qualcomm breaks that same key support, I'll back off the buy side until I'm able to set it up again.
For more information on how to trigger into a trade setup like this, please refer here.
