Chart Of The Day: Could Qualcomm Shares Fall Despite Positive Fundamentals?
Investing.com | Feb 01, 2022 14:35
Qualcomm (NASDAQ:QCOM) is scheduled to post its Q1 fiscal 2022 earnings on Wednesday, after the closing bell.
Analysts expect the San Diego-based chip manufacturer to report revenue of $10.44 billion and EPS of $3, up from a respective $8.26 billion and $2.17 in the corresponding quarter a year earlier.
Robust revenue growth is expected to be driven by strong demand for its 5G enabled chips as well as its latest 5G mobile platform offering, which it launched during the quarter.
So the fundamentals look strong, but what about the supply and demand conditions?
After trading in a range, the price peaked and is now retesting the bottom of the broken range. At the same time, it fell below the 50 DMA. The price rebounded off the 100 DMA and is now squeezed between the averages of the two timeframes.
On the other hand, the range was less than two months long, not making it significant in the long term. Furthermore, momentum indicators, such as the ROC and RSI, are curving up after nearing oversold conditions. The same goes for the MACD, which compares price averages of different periods. The indicator's short MA is aiming to cross the long MA. When that happens, the hand provides a buy signal, as current pricing strengthens over long-term ones.
Finally, the long-term trend is still up, as peaks and troughs on the weekly chart have been ascending. However, traders can trade the short-term downtrend, as marked by the daily peaks and troughs.
h2 Trading Strategies/h2Conservative traders should wait for a new high, extend the uptrend, or reverse, marked by a descending trend of peaks and troughs.
Moderate traders will sell if the price finds resistance by the trendline marking the range bottom.
Aggressive traders can short, once their trading plan addresses their budget, timing and temperament. Why would the stock fall if the fundamentals are positive? Perhaps, the recent business developments are already priced in and some traders want to cash out. Here is a basic example showcasing the essential components of a coherent trade plan:
Trade Sample - Aggressive Short
Entry: $175
Stop-Loss: $180
Risk: $5
Target: $160
Reward: $15
Risk-Reward Ratio: 1:3
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.