A 'Refreshed' Qualcomm Breaks Out — And This Might Only Be the Start
Without earnings or major economic reports to worry about in the near term, here's how traders can play this semiconductor stock.
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The narrow rally continues to pull the indexes higher. There has been no stopping big-cap tech. And if one sputters, even in the slightest, another name in this space has picked up the slack. Money isn’t leaving tech. It simply rotates from one AI-related name to another AI-related name.
While we are on the subject, Qualcomm QCOM, a name I have mentioned several times over the past few weeks, broke out Monday. The stock pulled back after an attempted breakout at the end of May. After a vertical move in May, this recent pullback should be the pause that refreshes.
Qualcomm has been riding the 10-day exponential moving average (EMA) higher since the start of May. I would use that as a flag on a pullback; however, we see an uptrend support line two dollars above the 21-day EMA. That is the level I would use as a stop on any long entry. Currently, a trader would risk around $15 using a close below $207.50 as an exit price.
That may feel like a big risk, but when you consider the huge moves we have seen on the strongest mega-cap tech names, you know the move in May could just be the first leg on a move to $250. We don’t have an earnings report to worry about in the near term, which gives the recent momentum a chance to accelerate.
More importantly, we don’t have significant economic reports to derail the market outside of Tuesday's morning’s retail sales numbers. I don’t believe that the result, good or bad, will derail this current tech rally.
I don’t know what’s going to shake tech. We can guess all we’d like, but my bet is it will be something the market doesn’t see coming.
At the time of publication, Byrne had no positions in any securities mentioned.
