We last checked in with the charts and indicators of Qualcomm (QCOM) back on November 2nd where we wrote that "As you sit on the edge of your chair until Tuesday evening, be ready to take action on QCOM if needed." Earnings did not disappoint Wall Street on November 4th and the stock has traded sideways the past two months with dips towards $140 being bought.
How do things look now as we head into 2021?
In this updated daily bar chart of QCOM, below, we can see that prices have been trending higher since the dramatic March low. QCOM has stayed above the rising 50-day moving average line and every dip towards the line has been a buying opportunity this year. The slope of the 200-day moving average line has been positive since February.
The trading volume has been active all year while the On-Balance-Volume (OBV) line bottomed in May and moved up into early November before sliding off the past few weeks.
The Moving Average Convergence Divergence (MACD) oscillator is in a take profits mode but has begun to narrow so we might see a new buy signal in the new year.
In this weekly bar chart of QCOM, below, we can see a large base formation for the stock around the $60 level. Prices have broken out on the topside this year on their way towards at least a triple of the base level. Prices are trading above the rising 40-week moving average line.
The weekly OBV line turned up strongly in early 2019 and suggests a significant amount of accumulation (buying).
The MACD oscillator is in a bullish alignment in this time frame and the recent narrowing may not necessarily lead to a bearish crossover.
In this Point and Figure chart of QCOM, below, we used weekly close only price data that was filtered by a five box reversal instead of three boxes. Here the software is projecting a potential longer-term price target in the $282 area.
Bottom-line strategy: QCOM could have been one of my recommended stocks for 2021 but
I went with two other names. QCOM would have been third on the list for the year ahead. Traders should approach QCOM from the long side and be prepared that if weakness in the broader market knocks QCOM down near $130 that it is a buying opportunity. The $282 area is our longer-term price target.
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