Qualcomm: A Technical Deep-Dive Confirms the Worst

Key Points

• An RSI hovering around 50 reflects indecision, with almost no upward momentum.
• Last week's bearish MACD crossover signals potential further downside.
• Qualcomm must hold above the 50-day moving average to avoid a fresh downtrend.

Shares of tech giant Qualcomm Inc NASDAQ: QCOM have climbed nearly 20% off their April lows, but it still feels like a stock struggling to wake up. They closed just over $146 on Monday, as they continue to drift lower since peaking at $156 in early May. For all the excitement sweeping through tech names lately, Qualcomm seems stuck in neutral.

As we've been writing about, this will be frustrating for investors because, fundamentally, at least, it's doing just fine. Qualcomm's latest earnings beat expectations on both revenue and earnings, and there has been no material change in its long-term story.

Yet Wall Street still isn't buying it. And as a closer look at its technical indicators reveals, there's good reason for the caution. Let's break down the charts and what they're telling us.

RSI: Stuck in the Middle

Qualcomm's Relative Strength Index (RSI) is sitting flat around 50, right in the middle of its scale, which runs from 0 to 100. Anything below 30 typically signals oversold conditions, while readings above 70 suggest overbought momentum. At 50, the message is clear: no strong conviction either way.

This kind of technical drift mirrors how the stock has performed for much of the year to date. There's no panic selling, but there's also no aggressive buying. RSI readings like this are common when the market is waiting for a catalyst and can be seen as a good reason for investors to hold back from jumping in too quickly.

MACD: Bearish Crossover Looming Large

Perhaps more worrying is what's happening with the Moving Average Convergence Divergence (MACD), a momentum oscillator that helps traders spot trend changes.

Last week, Qualcomm experienced a bearish MACD crossover when the short-term signal line crossed below the longer-term MACD line, and it's now inching toward negative territory.

This pattern is often seen ahead of further downside. It doesn't guarantee a sell-off, but it does suggest that momentum is weakening and buyers are losing control.

After failing to hold its gains from May, this crossover reinforces the idea that Qualcomm is slipping back into a holding pattern, if not an outright downtrend. 

Moving Averages: A Key Level Under Threat

Perhaps the most decisive technical test ahead lies in Qualcomm's moving averages. The 50-day moving average has remained firmly below the 200-day since October, a bearish signal that's likely offputting to even the most risk-friendly investors. Furthermore, the company's shares are sitting almost exactly on that 50-day line.

Why does this matter?

Because key levels such as the 50-day moving average often act as a line in the sand for traders, either as levels of support or resistance. If Qualcomm breaks convincingly below it, that could trigger fresh selling pressure and mark the beginning of a new downtrend. Conversely, if it bounces from this level, it could signal a short-term recovery attempt, but the lack of momentum elsewhere doesn't support much optimism just yet.

The Market's Message: Lukewarm at Best

Technical indicators aside, the broader message from the market and from Wall Street is one of caution. Qualcomm hasn't attracted the kind of bullish analyst attention we've seen pour into other names like NVDA Corp NASDAQ: NVDA or Advanced Micro Devices Inc NASDAQ: AMD.

While a few firms like Susquehanna and Benchmark maintained upbeat views in May, much of the commentary since April has been neutral at best, with no major upgrades or aggressive price target bumps. The prevailing mood, much like the stock's RSI, feels stuck in the middle.

This tepid sentiment reflects the company's current challenge: it's executing steadily but without a clear growth narrative to excite investors. The AI tailwinds propelling its peers haven't yet translated into the kind of breakout momentum Qualcomm needs.

What It'll Take to Break the Slumber

It's becoming increasingly clear that Qualcomm won't move significantly higher without a clear upside surprise. That could come in the form of a major analyst upgrade, a sharp pickup in demand, or a standout earnings report. Until then, the technicals offer the best clues for when sentiment might be shifting.

Qualcomm is no doubt a fundamentally solid business. But in a risk-on environment where capital is chasing growth and momentum, being "solid" isn't enough. This stock will need to wake up, and for now, the charts suggest it's still asleep.