Potentially with the broader market having topped in 2015 based on our big picture view, the current rally from Feb 2016 low might be bounce rather than new bullish cycle suggesting the upside is limited.
With that backdrop - QCOM appears to have topped in July 2014 and yet it's outperformance against the Nasdaq Composited topped in April 2009. This downtrend since July 2014 remains intact and having drop below the potential support around $56 is now vulnerable for further downside towards $35 - $30 region.
In addition, whilst I do not focus much on the fundamentals, however, note the continuous selling by the insiders and here is an article which could help appreciate why QCOM has been weaker Vs the Market since 2009 -
www.investopedi...siness-qcom.asp?partner=Ya...
Video Link -
www.danv-charting.co...y6P6zowf95xDojM.html
Here is the technical summary (also shown on the chart):
1. Has retraced 78.6% of the price drop from Jan 2000 high to Aug 2002 low
Relative Strength with Nasdaq Composite topped in April 2009 and despite the price continuing higher till July 2014 which has set up a price divergence.
2. Has dropped below $56 which was previously a strong resistance and should have acted as support but it seems to have failed. It might now act as resistance again.
3. On monthly chart the RSI has fallen below 30 for the first time in a while appears to be confirming the bearish cycle with 20 & 50 MAs forming a cross.
4. The bounce since Feb low is running into resistance zone with RSI on Weekly chart could experience resistance at 50.
5. On daily the price appears to be forming a potential topping pattern in over bought areas.
6. It has an earnings announcement on 20th April, which could disappoint leading to weaker prices as it is struggling against the competition (see the article above) in addition to a weakness in the wider market
Conclusion:
If the above observations play out then we could anticipate a retest of Feb 2016 low as initial target and probably make it 35 area in due course which has been structural support zone between 2005 - 2010.
Action:
Consider Jan 2017, $30 PUT for around $0.50 or better may be $0.4 (presently around 0.54 - 0.59). Either a limit order or leading in to the earnings announcement and price reaction the order could be worked for close to $0.4 .
If filled we need the price to drop to around 45 to double the initial outlay.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
With that backdrop - QCOM appears to have topped in July 2014 and yet it's outperformance against the Nasdaq Composited topped in April 2009. This downtrend since July 2014 remains intact and having drop below the potential support around $56 is now vulnerable for further downside towards $35 - $30 region.
In addition, whilst I do not focus much on the fundamentals, however, note the continuous selling by the insiders and here is an article which could help appreciate why QCOM has been weaker Vs the Market since 2009 -
www.investopedi...siness-qcom.asp?partner=Ya...
Video Link -
www.danv-charting.co...y6P6zowf95xDojM.html
Here is the technical summary (also shown on the chart):
1. Has retraced 78.6% of the price drop from Jan 2000 high to Aug 2002 low
Relative Strength with Nasdaq Composite topped in April 2009 and despite the price continuing higher till July 2014 which has set up a price divergence.
2. Has dropped below $56 which was previously a strong resistance and should have acted as support but it seems to have failed. It might now act as resistance again.
3. On monthly chart the RSI has fallen below 30 for the first time in a while appears to be confirming the bearish cycle with 20 & 50 MAs forming a cross.
4. The bounce since Feb low is running into resistance zone with RSI on Weekly chart could experience resistance at 50.
5. On daily the price appears to be forming a potential topping pattern in over bought areas.
6. It has an earnings announcement on 20th April, which could disappoint leading to weaker prices as it is struggling against the competition (see the article above) in addition to a weakness in the wider market
Conclusion:
If the above observations play out then we could anticipate a retest of Feb 2016 low as initial target and probably make it 35 area in due course which has been structural support zone between 2005 - 2010.
Action:
Consider Jan 2017, $30 PUT for around $0.50 or better may be $0.4 (presently around 0.54 - 0.59). Either a limit order or leading in to the earnings announcement and price reaction the order could be worked for close to $0.4 .
If filled we need the price to drop to around 45 to double the initial outlay.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
