Why Qualcomm's Latest Run at Resistance Has Bulls Paying Attention

Shares of tech giant Qualcomm Inc. (NASDAQ: QCOM) jumped roughly 3.5% on Tuesday, Jan. 6, lifting the stock back toward the $183 area. That level is not random. It marked a firm ceiling in December and was also a sticky zone for bulls back in October and November, making it one of the most important price levels on the chart right now.

What makes the current setup more compelling than previous ones is the structure taking shape underneath it. Since April, Qualcomm has been logging a clear series of higher lows, supporting a rising trendline that is now starting to push hard against a line of resistance around the $183 level.

The result is a tightening wedge formation that clearly shows technical pressure is building. Given that this is not the first time Qualcomm shares have been knocking on the door up here, investors are right to ask why this time will be different. As we'll see below, there are several reasons to think this might be the setup that finally sends the stock up towards $190 and keeps it there.

Why Qualcomm’s Setup Looks Like a Wedge, Not a Stall

At first glance, Qualcomm's recent trading might look like another familiar pause near resistance, something long-time holders have seen before. But structurally, this setup is different from the false starts of the past, with the stock grinding higher in a fairly controlled fashion for nearly nine months.

The stock's sudden big pop towards $210 in late October was lacking that strong structural foundation, and so it was no surprise when the move higher was aggressively sold. In Qualcomm's case, right now, though, the upward slope of the higher lows is a strong platform from which the stock can launch a sustainable breakthrough. If Qualcomm shares can push cleanly through the $183 area in the coming sessions, the next technical target would sit in the $190s. From there, October's spike high near $205 comes back into focus.

Qualcomm Catalysts Begin to Align Ahead of Earnings

It also helps that the technical picture is being reinforced by a steady flow of promising business developments. This week's strength has come chiefly from updates out of the CES conference in Las Vegas, where Qualcomm shared updates on several initiatives that underscore its push for diversification. 

Among the highlights was an expansion of its partnership with Google, which is focused on bringing more artificial intelligence (AI) capabilities into the automotive space. Qualcomm also unveiled its new Snapdragon X2 Plus platform, promising meaningful improvements in performance, battery life, and on-device AI processing. Add in further expansion of its IoT portfolio and new partnerships across automotive and industrial segments, and the narrative around diversification continues to strengthen.

The next major catalyst sits just ahead of us. Qualcomm's earnings report in early February will be closely watched, with expectations building for another beat versus analyst consensus. If the stock doesn't manage to do it on its own in the meantime, a strong report then could provide the spark needed to send shares into breakout mode. 

Qualcomm Must Prove This Setup Is Different This Time

Despite the improving setup, Qualcomm's history does justify some caution. After all, it was only last week that we were highlighting how the stock was back at 2021 levels after a worrying run of red days. And despite having a good track record of beating analysts' expectations at earnings time, the company also has a track record of frustrating investors with promising setups that ultimately go nowhere.

That context makes the $183 level especially important. A failure here would reinforce the view that Qualcomm remains range-bound, regardless of how constructive the longer-term trend appears. For the bullish case to take control, the breakout needs to be decisive and sustained, not another brief pop that fades under pressure.

For now, though, the chart is doing exactly what bulls would want to see. Higher lows continue to be printed against a line of resistance, while bullish updates are making headlines in the background. Wedges like this don't last forever, and when there's a breakout, it tends to be swift.

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The article "Why Qualcomm’s Latest Run at Resistance Has Bulls Paying Attention" first appeared on MarketBeat.