Good morning, Judy. QCOM p&f analysis....
QCOM provides an interesting example of the difference in severity of the aftereffects of a High Pole Top (HPT) when the NYSEBP is in bullish or bearish modes. In February '98, the NYSEBP was in Bull Confirmed status and QCOM had the first of it's 4 HPT's that have occurred this year at $53. The stock bottomed out twice at $47 but since the market backdrop remained favorable, the stock was able to recover to $60 by April. QCOM had another HPT at $56 in April, and the stock retreated to familiar territory, falling back to previous buying support at $47 by the end of June. The stock gave a Low
buy signal at $51 in June and this favorable shift to demand propelled the stock to $67. This was the highest price the stock had visited since 12/97 at $70. Dating back to February '97, QCOM had previously topped out at the following prices before eventually retreating: $63 (2/97), $62 (3/97), $62, $60 (4/97), $65 (9/97), $68 (10/97), $71 3 times in 11/97.
The HPT that occurred at $60 in August was deadly for the stock as it occurred with the NYSEBP in Bear Confirmed status and, not surprisingly, had the severest consequences. QCOM hit a low of $41 in September and since then, the stock looks like it is making a series of higher bottoms and has given 2 double top buy signals at $49 and $50. Wouldn't you know it though, the stock has moved into another HPT at $48, it's 4th this year. With the NYSEBP in Bull alert status, the severity of the decline will likely be mitigated by the secondary trend lines. There's a Bearish Support line at $42, and another at $39. The next p&f sell will be at $44 and the HPT suggests this is likely. I believe the bottoms made at at $41 and $42 in September will be able to hold and that will be the extent of the damage. The stock previously bottomed out at $42 in April '97 so there's previous buying support at that price level.
The stock has had bearish RS for quite some time now and is trading below it's BRL which is at $54. This is why taking that second buy signal at $50 was a dangerous proposition because the BRL loomed large a few $'s away. I would like to see the stock break it's BRL to turn more optimistic about the stock. A Bullish Resistance line at $55 also could limit upside movement. When the stock broke it's BSL at $53 in August with a second double bottom sell, that would've been a good time to sell the stock if you were holding.
What are your thoughts on the stock, Judy?
Bruce
|
