Dear readers,

This week, Qualcomm caught my attention as it has appreciated approximately 74% from US$49.10 to trade at US$85.62 in less than 3 months. This is due in part to the favourable announcement that Qualcomm and Apple have reached a multi-year settlement agreement (click HERE for more information)

Why is it interesting?

Personally, I think Qualcomm may be a potential short target with a favourable risk to reward proposition with a take profit of a few bids, base mainly on a technical perspective.

Basis to short

a) With reference to Chart 1 below, Qualcomm is on a strong uptrend evidenced by its rising exponential moving averages and golden cross formations. However, due to its relentless rally, it is extremely overbought. Most indicators are stretched. RSI last trades at 92.0 on 23 Apr 2019 which is the highest since 2000! ADX last trades at 48.5 on 23 Apr 2019