Qorvo Is Still Searching for a Bottom

We looked at semiconductor manufacturer Qorvo (QRVO) on June 25 when the stock market was still in a bull phase. We wrote: “I will assume that traders may still be long some shares of QRVO as our $212 price target was not reached. Traders should raise stop protection to $160 from $148. The $208-$212 area is our first price target now and the $332 is our longer-term objective.”

QRVO stalled in July and turned lower in August. We stopped out in October. 

A fundamental sell-side analyst just cut their price target for QRVO so let’s check the charts.

In this daily bar chart of QRVO, below, we can see that prices are still in a downtrend from August. Prices are trading below the declining 50-day moving average line as well as the declining 200-day line. The On-Balance-Volume (OBV) line shows an uneven decline from July as traders have been more aggressive sellers.

The Moving Average Convergence Divergence (MACD) oscillator has made a higher low in March even though prices have made a lower low for a bullish divergence. This is a cover shorts buy signal and not yet an outright buy signal.

In this weekly Japanese candlestick chart of QRVO, below, we can see that prices are in a downtrend and are trading below the negatively sloped 40-week moving average line. I fail to see a bottom reversal pattern and one small lower shadow is not moving the needle.

The weekly OBV line shows a drift lower for the past 12 months. The MACD oscillator is in a bearish alignment below the zero line but very close to a cover shorts buy signal.

In this daily Point and Figure chart of QRVO, below, we can see a potential downside price target of $109.

In this weekly Point and Figure chart of QRVO, below, the X’s and O’s yield a target in the $85 area.

Bottom line strategy: QRVO is in a downtrend and does not show us enough technical reasons to anticipate a bullish reversal. Avoid the long side for now and we could get a better buying opportunity in the months ahead.