QCOM Analysis

I know several of you are in QCOM and it's in a pretty decent position as a potential short sale trade so I figured I'd cover it for everyone.

 First a 5 day chart gives us an idea of the past, the tone and character of QCOM, I see a large triangle that has taken up most of 2012. When triangles are bigger than several weeks (at most-usually less than 2 weeks) they are almost always either tops or bottoms. If the preceding trend was up and the triangle forms, it is usually a top (as we see here), when the trend is down and the triangle forms, it's usually a bottom (UNG is an ascending triangle after a long downtrend). So this appears to be a major top.

 There's even a head fake move, it may not look very big, but ask a Technical Trader where SPX support is and they will tell you $1343.35, which is not true, resistance and support are zones, not exact numbers because they are created by emotional reactions, not calculators, however many technical traders would place and SPX stop at $1343.34, thus head fakes and stop runs are easy to create.


 QCOM 4 hour in the large triangle

 60 min chart with a recent break down and a bounce back in to the gap.

 15 min chart with the break down and bounce...

 Here's QCOM vs the SPY (red), you can see how the market's direction influences a stock's direction, it is actually the single biggest everyday influence on most stocks, however as the market slows in this area, QCOM is showing even worse relative strength at the bottom.

 That diminishing relative strength recently can be traced back to recent 3C action in the bounce-10 min chart going negative.

 At the fastest chart, 1 min, we can see that went negative, so it looks like the bounce in QCOM is coming to an end and soon we'll be looking for a break below the daily chart's triangle.

The migration of the 1 min negative to the 5 min chart and we see it on the 10 min chart as well, the 15 min chart is the only one left that hasn't turned negative yet, but I suspect it will soon. It would be great to get QCOM short above the triangle at >$64 - $65, but we may not get the chance. Keep an eye on the market as it could lend support for QCOM to make another head fake move a bit stronger than the last and maybe set some price alerts for QCOM.

You can always email me for an update.