During Tuesday's "Lightning Round' segment of Mad Money one caller asked Jim Cramer about Qualcomm (QCOM) : "This stock is up huge. Wait for it to come down," was Cramer's advice.
We last wrote about QCOM on July 30 and said, "Stay long QCOM from previous recommendations. Raise stop protection to a close below $96. The $137 area is our next upside price target." Let's check on the charts again.
In this updated daily bar chart of QCOM, below, we can see that prices made only a slight and temporary dip after surging to $113. In strong markets I have often seen strong stocks that do not dip much and do not fill breakaway gaps. QCOM is acting like a strong stock.
Prices remain above the rising 50-day moving average line as well as the rising 200-day moving average line.
The On-Balance-Volume (OBV) line has moved up with the price action, and the Moving Average Convergence Divergence (MACD) oscillator is still pointed upward in a buy alignment.
In this updated weekly bar chart of QCOM, below, we went back a few extra years to show the size of the base pattern. The price gap disappears on this weekly chart but the importance of the breakout is still there. Prices are above the rising 40-week moving average line.
The weekly OBV line is rising and close to a new all-time high. The MACD oscillator has already made a new high. A bullish picture.
In this Point and Figure chart of QCOM, below, we used weekly close only price data with a five-box reversal. Here the chart shows a potential longer-term price target of $248.
Bottom line strategy: Stay long QCOM from previous recommendations. Consider adding to longs on strength above $113. Raise sell stops to a close below $101. The $137 area is our first target with the $247 area our longer-term price objective.
