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Go Long on Qualcomm


All indicators favor this tech name.

Is Qualcomm's (QCOM) chart in trouble? Some think it is. But where do I stand?

The premise mentioned for a technical sell on this company is that Qualcomm should be sold, because it hasn't been able to take out its January highs. Last time I checked, the majority of stocks are well below their January highs.

In fact, the S&P 500 January high is 934.70, and now sits at 778.94 which is a drop of 155.76 or 16.66%. Qualcomm's January high was $37.71 and closed Thursday night at $33.84 which is a drop of $3.87 or 10.26%. Clearly, Qualcomm is ahead of the S&P 500 when simple returns are calculated.

Erlanger Chart Room (or ECR) allows us to compare Qualcomm against the S&P 500, as well as its sector and group. The blue lines below are Qualcomm's various relative strength measures, along with their 30-day exponential moving averages. All relative strength lines are moving higher and none have violated their 30-day exponential moving average. Qualcomm is still a leader on all fronts.

Another bearish argument suggests that buyers are on strike and sellers are emerging. The Erlanger Money Flow 20-day Advanced is persistently positive, as the Erlanger Positive Money Flow (blue) is well above its Erlanger Negative Money Flow (red). Sellers have not appeared from this measure.

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Position in QCOM

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