QUALCOMM Incorporated (NASDAQ:QCOM) Huawei ban will likely affect the chipmaker’s demand in the future
QUALCOMM, Incorporated (NASDAQ:QCOM), Intel Corporation (NASDAQ:INTC), and Xilinx, Inc. (NASDAQ:XLNX) were also in the news due to the Huawei news.Seeing as how Huawei is the world’s second largest phone maker and that it sources chips from the three American companies, the ban will likely affect the three chipmaker’s demand in the future. Although Xilinx has never publicly identified Huawei as a big customer, some analysts believe the company benefits from demand for chips in various 5G wireless base-stations. Intel supplies some of Huawei’s data-center products and QUALCOMM helps with the phone system.
China is a big market for the three companies and Huawei has substantial market share in China. Bulls hope that the trade war can be settled so there is less pain for the three companies. 51 top funds were long QUALCOMM, Incorporated (NASDAQ:QCOM) at the end of December, up 3 funds from the previous quarter. 65 elite funds owned shares of Intel Corporation (NASDAQ:INTC) at the end of December. 48 top funds owned shares of Xilinx, Inc. (NASDAQ:XLNX) at the end of the fourth quarter, up 12 funds from the previous quarter.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 75.30.
The projected lower bound is: 57.55.
The projected closing price is: 66.43.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with QUALCOMM INC), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 8.4869. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 10 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 31.19. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 12 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -148.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 8 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 13 period(s) ago.
Rex Takasugi – TD Profile
QUALCOMM INC closed down -2.045 at 66.210. Volume was 7% above average (neutral) and Bollinger Bands were 85% wider than normal.
Open High Low Close Volume___
68.930 69.150 65.969 66.210 21,419,952
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 77.87 71.15 63.14
Volatility: 73 80 49
Volume: 25,420,262 23,777,408 17,423,844
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
QUALCOMM INC is currently 4.9% above its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of QCOM.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on QCOM.O and have had this outlook for the last 2 periods.