Qualcomm Incorporated (QCOM) is a major provider of semiconductors for integrated circuits, CDMA technologies, and voice and data communications. The company earns licensing fees from device makers who use its intellectual property portfolio of system products. Qualcomm stock seems to be in a squeeze on softer demand for smartphones and disputes related to licensing fees. Shares closed Monday at $63.47, down 0.9% year to date and in correction territory at 17% below the 2018 high of $76.50 set on Sept. 18. The stock is also in bull market territory at 30.7% above its 2018 low of $48.56 set on April 26.

Analysts expect Qualcomm to report earnings per share of 82 cents when the company discloses results after the closing bell on Wednesday, Nov. 7.  Bank of America downgraded the stock to neutral from Buy on the struggles in a softer market for smartphones. It was also reported that Apple Inc. (AAPL) has been allegedly $7 billion behind on royalty payments to Qualcomm.

The Daily Chart for Qualcomm

Daily technical chart showing the performance of Qualcomm Incorporated (QCOM) stock
Courtesy of MetaStock Xenith

The daily chart for Qualcomm shows a stock that has had an extremely volatile year so far in 2018. The stock began to decline on Jan. 31 on a negative reaction to earnings. Qualcomm set its 2018 low of $48.56 on April 26 and then started its 2018 bull market run on a positive reaction to earnings. The upward momentum continued July 26 given another positive reaction to earnings. The stock set its 2018 high of $76.50 on Sept. 18 and declined to its 200-day simple moving average of $61.99 as a setup for the earnings report released on Nov. 7. Obviously, earnings do matter for Qualcomm.

The Weekly Chart for Qualcomm

Weekly technical chart showing the performance of Qualcomm Incorporated (QCOM) stock
Courtesy of MetaStock Xenith

The weekly for Qualcomm is negative, with the stock below its five-week modified moving average of $65.63. The stock is above its 200-week simple moving average, or "reversion to the mean," at $59.64. The 12 x 3 x 3 weekly slow stochastic reading is projected to decline to 30.60 this week, down from 39.66 on Nov. 2. At the Sept. 18 high, the stochastic reading was above 90.00 as an "inflating parabolic bubble." This bubble has popped!

Investors should buy Qualcomm shares on weakness to my monthly and quarterly value levels of $57.50 and $53.55, respectively, and reduce holdings on strength to my weekly and annual risky levels of $65.36 and $77.71, respectively.

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.