Qualcomm Incorporated (QCOM) shares fell nearly 2% in early trading on Thursday even though the company reported strong first quarter financial results. Revenue rose 0.2% to $6 billion – beating consensus estimates by $70 million – and net income of $0.98 per share beat consensus estimates by seven cents per share. The stock appears unlikely to break out from trendline resistance levels following the earnings report.

Qualcomm's financial results continue to be affected by ongoing disputes with Apple Inc. (AAPL) and its contract manufacturers. At the same time, CNBC reports that Broadcom Limited (AVGO) sees the earnings report as concerning, but not concerning enough to call off its acquisition bid. Broadcom would have to take a massive break-up fee to combat antitrust concerns. Investors will be closely watching the March 6 annual meeting for developments regarding a hostile takeover. (See also: Qualcomm: Increased Chance of Higher Broadcom Bid.)

Technical chart showing the performance of Qualcomm Incorporated (QCOM) stock

From a technical standpoint, the stock has been range bound since November of last year after experiencing a breakout following Broadcom's hostile takeover bid. The relative strength index  (RSI) has moved to neutral conditions at 50.81, but the moving average convergence divergence (MACD) has experienced a bearish crossover. The positive news is that the stock has near-term support near the 50-day moving average at $66.10.

Traders should watch for a breakout from upper trendline resistance at around $69.00 if Broadcom feels that it must increase its offer. With the "concerning" earnings report, there is also potential for a move below the stock's previous range to around $64.00. Traders are speculating that the acquisition could take place for between $70.00 and $80.00 per share, although the expectation is now closer to the low end. (For more, see: Qualcomm's Time to Decide Its Fate Has Come.)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.