Chart of the Day: QCOM Price Action

0:00We're back on Morning Movers here at the Qualcomm, slightly lower in the pre-market after Bernstream downgraded the stock to market perform from outperforming cut. It's price target down to 140 from 170. Bernstein said it sees memory headwinds from higher prices having a deleterious effect on overall smartphone shipments. Consensus estimates for Qualcomm, quote, now appear much too high according to the analyst. If you might share the Qualcomm or down more than 20% this year. Time now for our chart of the day, joining us for a breakdown. Brett Crowder, Senior Manager, Trading and Derivatives Coaching, Charles Schwab. It's good to see you this morning. We just talked about what it looks like year to day. You got a five-day look at Qualcomm first. Take us through what you know is there. Yeah, it's good to be with you this as well, Diane. It's five-day, five-minute chart. It's going to tell a little different story than what we were just mentioning as far as the news and the overall market that has been more bearish. This actually has a little bit of a bullish team to it. So let's take a look at it. Looking at the week, it's really been trading in this range from about 1.27.50 to 1.33.50.

1:04Bouncing in between there and you can see it's bounced off that 1.27.50. A couple times this week with a little bit more of an intermediate support area around 1.29. Now on the right hand side, if we look at the volume profile, what we see is a lot of the activity has been around 1.29.131.31.31. And so really it's extreme that this stock has not found as much interested. Now coming to the right hand side, what we're going to see is a stock rounded up to about Wednesday. And then since Wednesday, it's been taking a dive, falling right back down to that 1.27.50. From here, if we look at the RSI down below, what we're going to see is the RSI, though, has been making higher lows. So as the stock is dropping down, hitting that support again, bullish momentum has been coming up. It's been making higher lows with the bullish pressure. And something's got to give. The stock can't continue to drop with bullish pressure coming in on that short term. So either the stock needs to pop in RSI from here or the indicator needs to roll back over. And with that, supporting hit multiple times, it wouldn't be surprising to see

2:06the stock actually rally from this point. And so, you know, holding this 1.27.50 is kind of an interesting point. We're going to talk about a little longer term chart. But what we're looking forward to see doesn't hold with all this British news. Can the stock in fact rally from this point break that 1.29 and possibly make a little bit of a run here, Diane? Okay. All right. So let's zoom out. You got a long term chart. You've got a one year. What do we notice there? Yes. So on the one year, the first thing I want to point out is this gray bar that's along the bottom around 1.27.50 area. Now, what that is, is that's a long-term support resistance. It's been in place for weeks, years, even. It's going back to a three-year weekly chart. And so there's a major support level right there. And it hit it back in April. And it's added again. And so the question is, with this long-term, you know, or should I say this bearishness. So we've heard about recently, will this support continue to hold? Well, let's walk through it. So the stock did bounce off at April had a nice rally throughout most of last year, broke through the trend line early this year. And really from January

3:11on, it hasn't been good news for Qualcomm even making a gap at last earnings announcement. But when it made that gap, it made a small rally fell back down to this 127.50 128 area, again, making a lower low. But looking at the RSI, even on a longer-term chart, what we're going to see is that same bullish pressure coming in, the indicator making a higher low, creating what we call bullish divergence. And so again, something's got to give either with this bullish pressure coming in either the stock needs to rally or the indicator needs to fall. Something can't give us as being squeezed in the pressure's mounting. And so with this pressure from a long with the bullish momentum beginning in at long-term support, it wouldn't be surprising from a technical standpoint to see the stock rally possibly up to the 149, the old hide that had recently, or even a little bit higher than that. But, you know, long-term, it's well, short-term has been kind of in a downtrend for the year, bearish news overall. But if there is a technical spot where it could find

4:11support, this would possibly be as we'll see if this holds then. All right, good stuff. Thank you, Brett. That's Brett Crowder, Senior Manager, Trading and Derivatives, Coaching, Charles Schwab.