Qualcomm Shares Rally 5.33% as Bullish Reversal Pattern Emerges Post-7.29% Drop, MACD Golden Cross and Fibonacci Levels Signal Uptrend Potential

Candlestick Theory

Qualcomm (QCOM) has exhibited a notable bullish reversal pattern following a sharp selloff, with a 5.33% surge on October 13th closing at $161.78. This move suggests a potential short-term support zone forming around the October 10th low of $153.35, as the stock rebounded after a -7.29% drop. The recent candlestick pattern—a long white candle piercing above prior resistance levels—indicates strong buying pressure. Key resistance appears at $161.78 (recent high), with a secondary level at $165.66 (October 9th close). The consolidation around $161.78 suggests a potential continuation of the uptrend if the price holds above $153.35.

Moving Average Theory

Short-term momentum aligns with bullish signals, as the 50-day moving average (calculated at ~$159.00) crosses above the 200-day MA (~$155.00), forming a golden cross. The 100-day MA (~$157.50) reinforces this trend, suggesting the stock is in an ascending phase. However, the 200-day MA may act as a dynamic support level if the price retreats. A break below $155.00 could signal a retest of the October 10th support, while a sustained close above $161.78 may push the 50-day MA higher, extending the uptrend.

MACD & KDJ Indicators

The MACD histogram has expanded positively, with the MACD line (12,26,9) crossing above the signal line, confirming bullish momentum. The KDJ oscillator shows the K-line (~78) approaching overbought territory (threshold at 80), while the D-line (~65) remains in neutral ground. This suggests the stock is nearing a potential overbought condition, though the divergence between K and D implies caution—overbought readings may not immediately trigger a reversal. The KDJ’s alignment with the MACD’s bullish signal strengthens the case for a short-to-medium-term uptrend, though traders should monitor for a bearish crossover in the KDJ to avoid false breakouts.

Bollinger Bands

Volatility has increased, with the price touching the upper Bollinger Band ($162.39) on October 13th. The band width has widened from ~1.5% to ~3.5%, indicating heightened volatility. A contraction in band width may precede a breakout, but the current position near the upper band suggests the stock is in a high-risk, high-reward phase. If the price closes above the upper band, it could signal a continuation of the rally, while a pullback to the middle band (~$159.00) may indicate consolidation.

Volume-Price Relationship

The recent 5.33% gain was accompanied by a surge in volume (10.3 million shares), exceeding the 10-day average volume (~7.5 million). This validates the strength of the move and suggests institutional buying. However, the volume on October 10th (15.8 million shares) during the -7.29% drop also spiked, indicating significant selling pressure. The current volume profile supports the bullish case, but a decline in volume during subsequent rallies could signal waning momentum.

Relative Strength Index (RSI)

The 14-day RSI has climbed to ~68, nearing overbought territory (70). While this suggests the stock is overbought, the RSI remains below the critical threshold, leaving room for further gains. A close above 70 would confirm overbought conditions, potentially triggering profit-taking. However, given the strong volume and MACD alignment, the RSI’s warning should be interpreted cautiously—trends can persist in strong momentum environments.

Fibonacci Retracement

Key Fibonacci levels derived from the recent swing high ($162.39) and low ($153.35) include 38.2% at $157.50, 50% at $158.75, and 61.8% at $159.95. The current price ($161.78) is above the 61.8% level, suggesting the stock may face resistance at the 78.6% retracement (~$160.90) before testing the prior high of $165.66. A breakdown below $157.50 would invalidate the bullish case, targeting the 50% level as a potential support.

Backtest Hypothesis

The MACD Golden Cross strategy for QCOM demonstrates a historically favorable short-to-medium-term outlook, with a 60.53% win rate over three days, 52.63% over ten days, and 57.89% over thirty days. The maximum return of 3.72% during the backtest period aligns with the current technical setup, where the MACD and KDJ indicators concur on bullish momentum. While the strategy’s returns are modest, the high probability of positive outcomes suggests it is a viable tool for timing entries, particularly in conjunction with Fibonacci retracement levels and volume validation.