Why I might buy some Qualcomm shares early next week.
Updated
https://www.tradingview.com/x/twJ6HF9E/
Guys, one of the companies that does well from a weakening USD is Qualcomm (ticker - QCOM). Qualcomm is a company that will do well with a weakening USD because a lot of its operations are offshore USA.
From statista.com:
"Qualcomm revenue worldwide 2018-2023, by region
Published by
Thomas Alsop
, Jan 5, 2024
Qualcomm's revenue was a total of approximately 35.8 billion U.S. dollars in the fiscal year of 2023. Qualcomm generated over 22 billion U.S. dollars in China and Hong Kong alone. Vietnam surpassed Ireland, the United States, and South Korea, occupying the position of second region with the highest revenue, with around 4.5 billion U.S. dollars generated."
What does Qualcomm exactly do?
From qualcomm.com
"Every day, Qualcomm is transforming the way we work, live and communicate, pushing the limits of technologies like artificial intelligence to help us stay more intelligently connected. This digital transformation is advancing nearly every facet of society and business – from automotive, agriculture and education to healthcare and manufacturing."
Look, I don't know for sure what direction the USD will take this next week. Please see my other thread today on why I think the USDX is about to rally. Of course if the USD rally's northward then this would not be good for a Long-investment in Qualcomm. But here is the thing, any rally in the USDX I believe will be short-lived as the USA goes into an interest rate reduction next month which is pretty much 'in-the-bag'.
From Reuters 5 days ago:
The U.S. central bank will cut the federal funds rate by 25 basis points in September, November and December taking the range to 4.50%-4.75% by end-2024, according to 54% of those polled, 55 of 101.
Markets, which were earlier betting on a half-percentage-point cut in September, are currently pricing around 70% probability of a quarter percentage point cut next month.
So, l am not trying to justify the trade in my own mind, I thought it might be a good opportunity for you. I probably would not buy a CFD on this one, I would be buying shares and taking it long for probably a few months of course with a Stop-loss. Because longer-term investments can turn pair-shaped very quickly.
Now, onto the most important technicals. QCOM was up a whopping 67% this-year-to-18 June when its share price hit an all-time-high of 230.47. Since 18 June it share price was sold off due to a bearish head-'n'-shoulder's pattern on the 4hr, but I have done the measurements & this sell-off has played out to the downside so in other words I see no further threat from this bearish h'n's. Price normally want to recover after such a sell-off and retrace to retest the highs.
Now checkout the very bullish Cup'n'Handle pattern on the weekly. See chart. The other timeframe from the Daily right down to the 15m look supportive of price which has recently recovered from the sell off and getting support on all the important moving averages across all timeframes.
STOP LOSS: I might take 2 trades longer term as a stock trade, not cfd, because I avoid paying swap-rates.
Aggressive-Stop would be just under a recent swing-low on the 1HR, a price just underneath a Buy-order block for added protection. That Stop-Loss level is 163.10 which represents 6.23% wriggle-room if the Share-price were to fall.
A more conservative Stop-loss level is 152.30 which is right under the weekly-handle & underneath the lowest price there.
Take Profit: A take-profit level would be 360, this is riding on the back of the bullish Cup n Handle patterns on weekly and 4hr chart and on significant increase in sp next month when the USA reduces it's interest rate.
See chart of Daily below:
* Trading is risky. Please do not rely solely on my financial advice.
Guys, one of the companies that does well from a weakening USD is Qualcomm (ticker - QCOM). Qualcomm is a company that will do well with a weakening USD because a lot of its operations are offshore USA.
From statista.com:
"Qualcomm revenue worldwide 2018-2023, by region
Published by
Thomas Alsop
, Jan 5, 2024
Qualcomm's revenue was a total of approximately 35.8 billion U.S. dollars in the fiscal year of 2023. Qualcomm generated over 22 billion U.S. dollars in China and Hong Kong alone. Vietnam surpassed Ireland, the United States, and South Korea, occupying the position of second region with the highest revenue, with around 4.5 billion U.S. dollars generated."
What does Qualcomm exactly do?
From qualcomm.com
"Every day, Qualcomm is transforming the way we work, live and communicate, pushing the limits of technologies like artificial intelligence to help us stay more intelligently connected. This digital transformation is advancing nearly every facet of society and business – from automotive, agriculture and education to healthcare and manufacturing."
Look, I don't know for sure what direction the USD will take this next week. Please see my other thread today on why I think the USDX is about to rally. Of course if the USD rally's northward then this would not be good for a Long-investment in Qualcomm. But here is the thing, any rally in the USDX I believe will be short-lived as the USA goes into an interest rate reduction next month which is pretty much 'in-the-bag'.
From Reuters 5 days ago:
The U.S. central bank will cut the federal funds rate by 25 basis points in September, November and December taking the range to 4.50%-4.75% by end-2024, according to 54% of those polled, 55 of 101.
Markets, which were earlier betting on a half-percentage-point cut in September, are currently pricing around 70% probability of a quarter percentage point cut next month.
So, l am not trying to justify the trade in my own mind, I thought it might be a good opportunity for you. I probably would not buy a CFD on this one, I would be buying shares and taking it long for probably a few months of course with a Stop-loss. Because longer-term investments can turn pair-shaped very quickly.
Now, onto the most important technicals. QCOM was up a whopping 67% this-year-to-18 June when its share price hit an all-time-high of 230.47. Since 18 June it share price was sold off due to a bearish head-'n'-shoulder's pattern on the 4hr, but I have done the measurements & this sell-off has played out to the downside so in other words I see no further threat from this bearish h'n's. Price normally want to recover after such a sell-off and retrace to retest the highs.
Now checkout the very bullish Cup'n'Handle pattern on the weekly. See chart. The other timeframe from the Daily right down to the 15m look supportive of price which has recently recovered from the sell off and getting support on all the important moving averages across all timeframes.
STOP LOSS: I might take 2 trades longer term as a stock trade, not cfd, because I avoid paying swap-rates.
Aggressive-Stop would be just under a recent swing-low on the 1HR, a price just underneath a Buy-order block for added protection. That Stop-Loss level is 163.10 which represents 6.23% wriggle-room if the Share-price were to fall.
A more conservative Stop-loss level is 152.30 which is right under the weekly-handle & underneath the lowest price there.
Take Profit: A take-profit level would be 360, this is riding on the back of the bullish Cup n Handle patterns on weekly and 4hr chart and on significant increase in sp next month when the USA reduces it's interest rate.
See chart of Daily below:
* Trading is risky. Please do not rely solely on my financial advice.
Note
If you want to be super-aggressive on S.L. 168.15. But on an aggressive Stop you should be risking less of your capital. Just remember that. With such a tight stop you could risk for example 0.25% of your total capital. When I trade currency's I often risk only 0.25%. When I trade gold I generally do not use stop-losses because I understand the flow of the gold price a lot better.
Finally, here is a 30m chart showing prices recovery recently and currently at a confluence of support with price above the moving averages which are all close to price and underneath.
Trade active
LONG QCOM at a bullish candle with price settled & no volatility. Avoid buying the market open. Or buy on the first deep retracement into a 38.3 or 50 golden zone. See Stop Loss and TP aboveTrade active
I am long in QCOM:
Confirming I did get long in this trade with QTUM yesterday in Australia with my stock broker interactive brokers.
As I say above, QCOM tends to 'weather the storm' very well in a low interest rate environment.
(please see my other post at the weekend where I talk of a rally this week in the USDX)
So, if USDX is rallying then why did I take a punt on some expensive QCOM shares. Short answer, I am very compulsive when I get something in my head. But look, seriously, the US dollar I think might claw back over the next 2 to 3 weeks but the path of least resistance for it is to fall lower as it's underneath in terms of price its' critical moving averages. By the way, is it gonna tank when Mr Powell makes his move next month? In the medium time horizon, this sustained weakness in the USD bodes well for stocks like QCOM, apple, Mcdonalds and my research tells me the number 1 stock to buy on USD weakness is google. I'm guessing you worked it out, all these businesses have their operations/franchises and much of their earnings in non US dollars. Did I tell you about the massive cup & handle pattern on the weekly timeframe for QCOM...?
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