Qualcomm Has Slipped in the Short-Run Weakening My Conviction

 | Jun 15, 2018 | 11:27 AM EDT
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Last week the charts of Qualcomm Inc. (QCOM)  looked positive and I wrote that "QCOM has been difficult to trade but it looks like we could breakout to the upside based on the Point and Figure chart. Aggressive traders could probe the long side here risking below $55 for a potential rally to $72."

Here we are a week later and I am less convinced. I typically do not flip back and forth with my opinions but let's check the charts again this morning.

In this daily Japanese candlestick chart of QCOM, below, we can see the candles have been bearish since the rally to the $62 area.

Prices have been testing the rising 200-day line this week and have so far not bounced strongly up from the line.

The daily On-Balance-Volume (OBV) line has weakened so far this month and now the Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal.

In this updated Point and Figure chart of QCOM, below, we still see an upside price target of $72 but we have added in the volume at price data on the left scale. There has been a lot of volume traded above $62.25. This "volume overhang" may be acting as resistance and hence the column of "O's" on the chart now.

Bottom line: One week I am bullish and the next I am not so sure. If you are long I would suggest raising sell stop protection to $57 from below $55. Flip flops are for wearing at the beach not for analysts.

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