QCOM Qualcomm Analysis April 2016 (W,M,Q)
Created on Thursday, 07 April 2016 05:25
Written by Austin Galt
Qualcomm Inc (QCOM) is engaged in the development and commercialisation of a digital communication technology called code division multiple access (CDMA) and the orthogonal frequency division multiple access (OFDMA) family of technologies.. It is listed on the NASDAQ with a market capitalisation of around $75 billion. Price last traded at $50.62.
Let’s begin the analysis with the quarterly chart.
QCOM QUARTERLY CHART
We can see the massive smackdown from the 2000 high at $100 which finally bottomed out in 2002 at $11.61. Since then price has been steadily trending up making a series of higher highs and higher lows. I believe the next higher low to now be in place at the $42.24 quote.
I have added Fibonacci retracement levels of the move up from 2002 low to the most recent higher high. This correction clipped the 50% level so a decent retracement.
The Fibonacci Fan shows the recent low right around support from the 61.8% angle which looks nice.
The RSI is oversold while the MACD indicator is still bearish so caution still needs to be heeded.
QCOM MONTHLY CHART
The Bollinger Bands show price clinging to the lower band during the downtrend and while price looks like it has started to leave the lower band it is still too early to confirm anything.
I have added Fibonacci retracement levels of the move up from 2008 low to 2014 high and fairly deep retracement has already been witnessed with price pulling up just short of the 76.4% level. If I new lows are still ahead, which is not my favoured scenario, then this level will be one to watch and stands at $40.86.
The Fibonacci Fan shows the recent low at support from the 76.4% angle and the next challenge will be overcoming the 61.8% angle. I suspect another test of the 76.4% angle is on the cards before that though.
The RSI showed a bullish divergence at the recent low. If I am wrong about the higher low already being in place then one final marginally lower low would likely set up a triple bullish divergence.
The MACD indicator has just made a bullish crossover after a sustained move down so that is something for the bulls to get excited about.
QCOM WEEKLY CHART
The Bollinger Bands show price bouncing up to the upper band however some toing and froing between the bands is common during trend changes and I favour a move back down to the lower band to put in a higher low.
The Fibonacci Fan shows the recent low was at support from the 50% angle and price now looks to be finding support up at the 61.8% angle. I favour price dipping back below the 61.8% angle and makes price decide if it really wants to head back down to the 50% angle. I doubt that and expect price to then move back up solidly.
I have added Fibonacci retracement levels of the recent move up off the low. The first correction in a new bull trend often makes a deep retracement and I favour a move back down to at least the 76.4% level in line with that. This level stands at $44.90.
The RSI showed multiple bullish divergences at the recent low and if price were to make one more marginal low then this would likely not be altered.
The MACD indicator is bullish although the averages appear to be coming back together and a bearish crossover looks a real threat.
Summing up, I expect price to make a deep correction now and setup a higher low while one final marginally lower low can’t be discounted either.
Disclosure – I have no financial interest in QCOM.