Chart of the Day: A Tech Holding Finds Itself in a Tough Spot
These shares just cannot get anything positive going. Here's what the chart reveals.
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We continue to be patient with Qualcomm QCOM, but that patience is starting to wear thin. With the success of other chip companies moving to all-time highs or even yearly highs on good volume, it is a shame not to see the "Big Q"participating. In fact, not only is Qualcomm not joining in but the stock simply trades poorly when the opportunity to rise comes around.
We see strong resistance around the $160 area recently, even a bearish double-top formed at the price, at a time when other chip manufacturing stocks were rising up sharply. Talk about your bad luck, but the chart was clearly saying Qualcomm was not ready for "prime time." At this point, some sideways action to build a base would be welcomed.
The indicators reflect the bearishness. Moving average convergence/divergence (MACD) has been on a sell signal since early June, stochastics (pane 4) just hit a recent low, while the ADX is rising in a downtrend, which tells us the strength of the down move is powerful. Now, the price action — while bearish — seems to find support around the $140-145 area, so we'll give this the benefit of the doubt but hold a very tight leash on the stock.
We rate Qualcomm a One in TheStreet Pro Portfolio, or "buy at anytime."
At the time of publication, TheStreet Pro Portfolio was long QCOM.
