Is QUALCOMM Setting for a Break Out?

Published on Wednesday, 13 June 2012 07:36 Written by TradersHuddle Wire

New York, June 13th (TradersHuddle.com) - QUALCOMM Incorporated (NASDAQ:QCOM) closed the trading day at $59.40, near its 50 day and 200 day moving averages set at $61.79 and $57.88 respectively. QUALCOMM's price action placed the stock above the 200 day moving average but below its 50 day moving average, a setup that signals a possible break out.

QUALCOMM Incorporated (NASDAQ:QCOM) develops and delivers digital wireless communications products and services based on ots CDMA digital technology. It provides integrated CDMA chipsets and systems software, technology licensing, Eudora email software, and satellite based systems.

QUALCOMM seems to be setting up for a tight range between the 200 day moving average as support and the 50 day moving average serving as resistance.

A tiered approach, appears to be the best strategy to maximize possible movements in the stock, as traders could establish a small position in QUALCOMM and wait for the stock to break out above its 50 day moving average at $61.79. Then they could add to the position as momentum builds with the breakout. On the flip side, if support being referenced at the 200 day moving average set at $57.88 breaks, it could signal further downside pressure for QUALCOMM.