During Tuesday's Lightning Round segment of "Mad Money" one caller asked Jim Cramer for his thoughts on Qualcomm (QCOM) .
"I like Qualcomm a lot and I would buy it here," Cramer replied.
Let's check out the charts of Qualcomm. In our June 8 review of QCOM we wrote, "Traders could go long at current levels risking to $125 and/or on strength above $140." Let's see how things look now.
In this daily bar chart of QCOM, below, we can see that prices have traded sideways since our June 8 review. Traders should be long QCOM, risking to $125. Prices are trading around the 50-day moving average line and just below the 200-day line. The On-Balance-Volume (OBV) line is overall steady but shows some improvement since early May, giving us a hint that buyers are more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is just slightly above the zero line in bullish territory.
In this weekly candlestick chart of QCOM, below, we can see that prices are trading just below the rising 40-week moving average line. Notice the lower shadows below $130 in March and May. Lower shadows tell us that traders and investors are rejecting the prices below $130. The weekly OBV line shows only a small and temporary decline when prices corrected to the downside earlier this year. The MACD oscillator is just above the zero line and narrowing toward a potential buy signal should or when the two moving averages cross to the upside.
In this daily Point and Figure chart of QCOM, below, we can see the software is projecting a potential downside price target in the $109 area. A trade at $142.18 should improve the picture.
In this weekly Point and Figure chart of QCOM, below, we can see that the $225 area is a price objective.
Bottom line strategy: Traders who went long QCOM earlier this month should continue to hold those positions with a $125 sell stop. Add to longs on strength above $142.18. Our price targets are $160, then $200 and $225.
