There are a lot of stocks out there, but in our estimation Qualcomm, Inc. (NASDAQ:QCOM) remains a name best left for other bulls and bears to worry about with questionable conditions off and on the QCOM stock chart. Let me explain.
Sometimes stocks are made for watching safely from the sidelines. QCOM stock in our view remains one of those situations. I last discussed our very neutral stance back on May 19, which flew in the face of some increasingly confident action by Qualcomm investors on the price chart.
At the time, QCOM stock was rallying aggressively in the face of seemingly bad news related to Apple Inc. (NASDAQ:AAPL). The tech Goliath and world’s largest company had announced it was suspending its royalty payments to Qualcomm and as a result forced Qualcomm management to reduce its guidance.
Nevertheless, investors were collectively of the mind the situation was better-than-feared or simply provided some much-needed clarity to move shares of QCOM higher. Doink!
Since then, over the last several weeks and following a brief continuation bid in QCOM stock, it has been an all downhill situation of sorts off and on the price chart with shares down about 4% for the period.
Off the QCOM chart, some of the modest weakness can rightfully be attributed to
an expanded lawsuit by Apple. The company intends to prove Qualcomm’s current licensing business is illegal and allows QCOM stock to generate revenues and artificially high profits it shouldn’t be entitled too.
But while the legal repercussions could be serious to Qualcomm stock’s bottom and top-lines, it’s equally challenging to know how and when that’s all going to play out.
As well and as of today, those often other leading lines found on the QCOM price chart aren’t revealing their intentions to bulls or bears just yet either.
QCOM Stock Weekly Chart
To say that QCOM stock has been tricky with its intentions in recent months is not an exaggeration. Since forging an out-of-“right”-field breakdown back in January, Qualcomm has offered a little something for both bears and bulls, but absolutely nada for investors overstaying their welcome.
Bearing that in mind, our last analysis of QCOM stock offered up the name as a hands-off situation until conditions improved to our liking. But and as much as I’d like to say otherwise, this strategist is still on the fence.
Currently, QCOM stock is wedged between the two Fibonacci levels as shares flash contrasting price patterns on the weekly view. One camp of investors will eventually prevail, but I’m uncertain of whether it will be the bulls or bears.
So, what am I seeing? First, there’s a bearish broadening formation pointing lower. If the pattern prevails it would mean new lows for QCOM stock. Personally, weakness below the 62% support is where I might view Qualcomm as a trending short with increased potential to hit new relative lows.
Alternatively, a bullish inverse head-and-shoulders could be developing in QCOM stock.
If shares of Qualcomm managed to put in a higher low relative to the right shoulder that could go a long ways towards signaling an eventual breakout of the neckline and bullish trend confirmation.
Right now and bottom-line though, I don’t see anything so compelling either off or on the price QCOM stock chart as to make me anxious to jump the gun as a bear or a bull. As such, I remain unapologetic in offering the same advice to other investors to wait on one’s thumbs for the time being.
Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
