Qualcomm (QCOM) Testing Previous Support as Resistance
a couple of weeks ago, we observed a bullish engulfing candle on the daily chart of Qualcomm (QCOM). This suggested a bullish outlook in the short-term against a medium-term bearish trend. Thus, we were anticipating a rally, and a subsequent dip to revive the prevailing bearish trend.
QCOM Daily Chart
(click to enlarge)
The Bearish Trend:
- First of all, we can see that the bearish trend is a medium-term one, since last November.
- The longer term mode appears to be sideways, or directionless. While the bearish trend could simply be within a sideways market, we can at least say that there is NO bullish trend.
- This is the basis on why I believe the market will fade the current rally.
- We noted a key resistance around 56 in our previous assessment of QCOM.
- Indeed price has come up to 56, but we have yet to see evidence of resistance, though price has not broken above 56.
- 56 was a previous support pivot that could turn into resistance.
- Furthermore, the daily RSI has tagged 60. If the market is indeed still bearish, the RSI should hold and turn down at 60, which it might be doing.
- I think there could be some break above 56, but as long as it is brief and the market quickly fades the rally, the bearish outlook is still valid.
- But if price can break above 56.10, the market is likely turning from bearish to sideways.