How to Trade Qualcomm After It Reports Earnings

Qualcomm is set to report earnings on Wednesday after the markets close. Whether it goes higher or lower, here's how to trade it after the event.
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Qualcomm  (QCOM) - Get Report will report earnings on Wednesday and this name has been on fire.

Not only have chipmakers seen a steady and better-than-expected rise in demand, but Qualcomm, specifically, has plenty of catalysts.

Now working with Apple  (AAPL) - Get Report and with 5G making its way to the consumer, analysts expect robust growth acceleration next year.

Investors want to see Qualcomm deliver on the current quarter, but more importantly they want to hear management’s forward outlook. Let’s look at the charts.

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Trading Qualcomm

Daily chart of Qualcomm stock.

Daily chart of Qualcomm stock.

Luckily for Qualcomm investors, the charts are pretty straightforward. I love the way shares pulled back in October and found support at the prior September high.

That September high is also when the rest of the market topped out. Only unlike most of big tech and the Nasdaq overall, Qualcomm didn’t put in a lower high in October. It rallied to new all-time highs.

From here, things get interesting though. On a bullish reaction to earnings and/or the election, see if Qualcomm can challenge the $132 to $132.50 area. There if finds the two-times range extension and prior all-time high.

A break above this area opens up the potential for a rally to $150 and the 261.8% extension at $154.74.

On the downside, keep an eye on that $122 area, which was resistance in September and support in October. Below that area and the 50-day moving average could open up the stock for a decline toward $110.

Near the $108 to $110 area, Qualcomm stock should find a demand level, which was significant in August and September. Further, it will find the 100-day moving average in this zone.

A close below $108 seems somewhat unlikely, but it would open the door to $100 and potentially the 200-day moving average below that.

At this point, I mostly want to see if Qualcomm stock can close north of $132.50 for a potential breakout or south of $120 for a larger dip.