Is there a light at the end of the tunnel?Qualcomm is an American multinational company that designs wireless telecommunications products and services. The company designs chips, which are widely used in the production of smartphones.
Mission Statement: “Qualcomm defines sustainability as a strategy that drives long-term growth and profitability by including environmental, social and corporate governance issues in their business decisions as they relate to the key spheres of influence: workplace, supply chain, local communities, industry and the public policy realm.”
News flow: In January 2017 Apple Inc. sued Qualcomm Inc. and filed a $1 billion lawsuit in an American court. A court document cites a claim on patents and registered designs. After this Qualcomm’s stock has fallen for 19%.
Qualcomm has published a report for the third quarter of fiscal year 2017, which ended on June 25. According to the company’s CEO, Steve Mollenkopf, the results appeared to be better than expected.
Total revenue grew from 5.01 billion US-dollar in second quarter to 5.37 billion US-dollar in third quarter. That represents an increase of 7%. However, total revenue is 11% less than in third quarter of 2016.
Based on 15 analysts offering 12 month price targets for QCOM in the last 3 months:
The average price target of 61.96 US-Dollar
The maximum price target of 70.00 US-Dollar
The lowest price target of 55.00 US-Dollar
Today Qualcomm’s stock price is about $52.50 a share, which means it is recently below the lowest price target.
Fundamental Data:
P/E: 13,76 / Dividends: 2.02/3.82% / Revenue Growth Rate: -6.83% / Net Income Growth Rate: 8.23% (Source: teletrader).
Chart Tools:
What say the technical analysis methods I use?
The risk management tool used here is the own-developed “Traffic Signals System” (TSS) and it will be implemented in my future analyses.
The black line in the chart: the starting price of the idea is 52,5 US-Dollar.
The red line in the chart: the stop loss is lying at 50,5 US-Dollar.
The green line in the chart: here for me the first further turning point in the idea = first goal at about 54,5 US-Dollar.
Oscillator: The RSI of Qualcomm values of approx. 65 and forwarding to overbought territory.
Preis indicator: The stock price is below the SMA200, which could suggest another barrier at approx. 55,4 US-Dollar.
Trend indicator: MACD (Moving Average Convergence/Divergence) is still in the positive zone, the trend is rather neutral and therefore for me the MACD is neutral.
Conclusion:
Fundamentally, despite the conflict with Apple, Qualcomm was able to increase their quarterly revenue. News-based data provided by observed analysts the lowest recent price target is still above the actual price. Chart-based data shows a broken downward trend (trend channel in the chart), which could be reversed to a new upward trend (green arrow in the chart).
Main parameters of the idea:
Parameters of the idea Start price: $52.50
Current price: $52.50 (0.00% off the start price)
Stop Loss Actual: $50 (-5% off the start price)
Take Profit: $70 (new highest price target)
This idea has been running since today.
Both Wikifolio's, UMBRELLA (www.wikifolio.com) and FuTureUS (www.wikifolio.com ) can be invested in Qualcomm.
“Disclosure: The trading ideas published here are neither to be understood as a recommendation nor as an offer or an invitation to buy or sell financial instruments and should not be understood as such.
You must also assume that the author holds the recommended position in his portfolio and benefits from the implementation of his trading ideas.”
