From a technical analysis perspective, the 200-day moving average is within a bullish climbing trend. Unfortunately, the faster-moving averages are relatively placid and after falling below, shares are now trading lower than the 60-day and 90-day moving averages.
Last week, the 200-day moving average was more or less tested. While support held, another test (for example, after earnings) may push the chart dangerously close to a bearish trend. Keep a close eye on the $62 price area.
A disappointing earnings release may cause a price drop below $62 and the chart may shift from bullish to bearish shortly after. On a positive note, I believe Qualcomm will not only meet, but will beat expectations. I expect earnings above $1.18 per share.
Shareholders receive $1.40 annually in dividend payments, placing Qualcomm's yield at a highly respectable 2.2%. Moreover, the payout ratio is less than 30%, placing expected future dividends well into the safety zone I like.
Forget about short-sellers zeroing in on Qualcomm -- almost zero desire with only 0.8% of the float shorted. That's a lower rate than Apple even at Apple's $700 per share peak. Qualcomm investors appear to be in good shape now, and I expect the same after the company releases earnings. If you're an investor wanting to lower your volatility this week, look to sell the May $70 calls for 20 cents or more if your transaction costs are not cost-prohibitive. QCOM Revenue Quarterly data by YCharts At the time of publication the author had no position in any of the stocks mentioned. Follow @RobertWeinstein This article was written by an independent contributor, separate from TheStreet's regular news coverage.