QUALCOMM, Inc. (NASDAQ:QCOM) had the fourth consecutive negative session and lost nearly 7% from the latest swing high of $74. This sharp loss comes on the back of the rumor of Intel Corporation (NASDAQ:INTC) occupying a socket of 2016 iPhone units with its LTE chip, a socket reserved for QCOM chips for a long time. If this turns out to be true, then it would be a huge positive for Intel and naturally, QCOM would take the hit on this potentially zero-sum game as a possible implication, Apple would not depend on QCOM for the baseband modems that much.
According to the market estimates, the huge 60% share for chipsets in mobile phones, controlled by QUALCOMM, Inc. (NASDAQ:QCOM) would be affected by this kind of a deal as the future of the other chips the company has in iPhone would become uncertain and more than any financial impact right now, the symbolic message might be scary for the investors.
Technically, the stock is just grinding down from the early 2014 highs of $80+ levels. The series of lower highs and lower lows are not very encouraging, keeping the medium term downtrend alive. The weekly chart clearly shows the resistance line pushing the price down and a retest of the $62 levels or even $60 levels can’t be ruled out, especially keeping in mind the viciousness of the fall in the last 4 sessions.
The long term bulls would keep their fingers crossed as long as the price remains above $60, where both the 2012-13 swing low area and the lower boundary of the long term channel coincide, making it a very strong support level. If the correction extends in both price and time, then the price action near $60 will determine the future of the stock in not only in the next few months but in the next few years too.