QCOM breaks back below 20-day moving average
QUALCOMM Incorporated (QCOM) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
QCOM ended Wednesday at 114.56 losing $2.02 (-1.73%) on low volume, slightly underperforming the Nasdaq 100 (-1.67%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 114.79, QUALCOMM Incorporated confirmed its breakout through the previous session low after trading up to $0.24 below it intraday.
Daily Candlestick Chart (QCOM as at Sep 16, 2020):
Wednesday's trading range has been $3.45 (2.92%), that's slightly above the last trading month's daily average range of $3.11. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for QCOM.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Despite a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 113.00 (S1). The stock closed back below the 20-day moving average at 115.39. When this moving average was crossed below the last time on September 8th, QCOM actually gained 3.87% on the following trading day. After having been unable to move lower than 114.79 in the previous session, the share found buyers again around the same price level today at 114.55.
Although QCOM is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the close-by swing low at 111.57 where further sell stops could get triggered.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for QUALCOMM Incorporated. Out of 567 times, QCOM closed higher 53.44% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 56.97% with an average market move of 0.63%.