In most instances, price support is only as good as the number of times it's been tested.
If a company pulls back and prints a low, then retests that low a couple weeks later, we consider it price support, but many times I'll look for other corroborating technical evidence before placing a buy order. I feel much better, however, about price support if it's been tested multiple times. With that in mind, let's look at the 2-year daily chart of QUALCOMM Inc. (QCOM):
Enter QUALCOMM (QCOM):
After pulling back in late-October 2020 to set a bottom near 117, QCOM has since fallen back and found support from 117-121 on 7 more occasions! Nothing provides us a guarantee that a price support level or range will hold again, but you'd at least have to admit that price support appears solid here, right? The AD line on QCOM remains very strong and QCOM is one of the best performers in the very weak semiconductor industry ($DJUSSC). Until it no longer holds, expect yet another bounce for QCOM from this key support zone.
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Happy Trading!Tom BowleyChief Market StrategistEarningsBeats.comBetter Timing. Better Trades. |