Qualcomm (QCOM) - Get Report finished last week with a very soft performance. The stock fell more than 2.3%, putting it in the top 10 losers list in the Nasdaq 100. Volume on the decline was well above average, extending a string of heavy selling pressure that began in late October. Shares have held up well despite this trend, but that could soon change.
Patient Qualcomm bulls may see lower entry levels soon.
Qualcomm began to stall immediately after reaching new 52-week highs in late October. The stock had battled hard to eclipse the ugly September spike high, but was unable to build any fresh momentum.
Shares attempted to break out once again last week, after holding a key support zone earlier in the month before finishing the week at the lows. This topping pattern is looking more ominous now that its stretching into its 11th week.
Qualcomm remains in the middle of its 11-week range, but upside momentum appears to have evaporated. As this continues to play out, investors should expect more downside in the near term. The stock has a very important support zone in place near the $64 to $63 area. Its very likely this zone will be tested again.
If Qualcomm is unable to regain its footing here, a much deeper pullback could be on the way, one that could drive shares all the way down to the 200-day moving average. Until the area near the December lows is retested, Qualcomm may prove to be a very frustrating long.
This article is commentary by an independent contributor. At the time of publication, the author held no position in the stocks mentioned.