Chart of the Day: As This Holding Builds a Second Base, Will It Be the One?
The stock remains down but before earnings that is probably a good thing.
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Semiconductor stocks have mostly been higher over the past year but certainly ran into a buzzsaw of sellers last summer. Such was the case for TheStreet Pro Portfolio holding Qualcomm QCOM, which was pounded mercilessly in July but found a low and started to build a solid base. However, that breakout in November failed miserably as the new stock buyers shed Qualcomm in short order.
Notice the sharp move down after the "false breakout" arrow, heavy distribution, which means professional selling by large institutions. The bulls want the opposite to occur (buying by big funds).
So, the stock is working on base #2, and maybe this will be the one. To be sure, bulls are not giving the stock the benefit of the doubt and will probably wait for a double-confirmed breakout (two higher highs, higher lows). Momentum is starting to roll again, and the stochastics are improved.
Yet, price action is not bullish, not until Qualcomm exceeds the moving averages above. While that will take some heavy lifting, this recent base seems to have limited the downside potential (call it $145-150).
We like Qualcomm and rate it at a One in TheStreet Pro Portfolio, or "buy at any time."
At the time of publication, TheStreet Pro Portfolio was long QCOM.
