Qualcomm Five-and-Diming It
One West Coast trader I talked to recently had been
voicing some rather bullish opinions about Qualcomm.
These were based purely on speculation that Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating) was in talks
with China last week to make some headway in making CDMA the future standard for
all of China’s wireless communications in the future.
But, as I observed many times in the past, the technicals overruled the
fundamentals in QCOM.
What I’m showing looks like one of those no-brainer
patterns which, if you’d seen it form sometime over the past three days, might
have been one of more easily tradable setups this year.
You have QCOM bouncing down from the top of a 10-month trend
channel and five-month trading range. In my work, confluences that standout as
conspicuously as this one on a weekly chart tend to be more reliable in producing
the anticipated move than the shorter-term types of confluences you’d spot on a
daily chart.
By the way, my reference to QCOM five-and-diming it in the
title of this piece has nothing to do with any expectation on my part that the
price of QCOM will ever trade below a dollar. I’m only making reference to the
confluence of the five-month trading range and the 10-month trend channel.
Till Thursday,