Qualcomm And Nokia Slam Into Resistance On Gap Ups

Qualcomm Inc QCOM reported stellar first-quarter 2021 earnings on Wednesday and moved higher.

Qualcomm reported earnings per share increase of 115% from the same period last year to $1.90, versus the Street’s estimate of $1.67. The company’s revenue increased 52% year over year to $7.9 billion, which beat the Street’s estimate of $7.6 billion.

Nokia Oyj NOK gapped up when the market opened also after a strong earnings beat, however, both stocks ran into a group of sellers. As the saying goes, “gap ups are for selling and gap downs are for buying.”

See Also: Why Is Nokia's Stock Trading Higher Today

The Qualcomm Chart: On Thursday, Qualcomm’s stock gapped up to resistance at $145 and quickly sold off. Prior to Thursday, Qualcomm was trading down over 18% from its all-time high of 167.94 it made on Jan. 20. The three-month downtrend helped Qualcomm fill a gap left behind following the company’s third-quarter 2020 earnings report.

Qualcomm’s stock is trading above both the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day EMA, both which are bullish.

Qualcomm is trading in between support at the $140 mark and below resistance at $145.

Bulls want to see Qualcomm’s stock regain the $145 level as support. If it can reclaim that level, it could trade up towards the gap above the next resistance level at $152. Since gaps fill 90% of the time it is likely Qualcomm will trade back towards $160 in the future.

Bears want to see sustained bearish volume to push Qualcomm’s stock back below support at $140. If it loses that level as support the stock could retest the $129.66 mark.

The Nokia Chart: Nokia’s stock gapped up just over 16% opening on resistance at $4.86 but, like Qualcomm, immediately ran into sellers. Unlike Qualcomm, Nokia is trading down about 92% from its all-time high of $62.50 it made way back on June 20, 2000. Nokia’s stock has been in a decades-long downtrend popping up only briefly after being targeted by the r/WallStreetBets community on Jan. 27.

Nokia is trading above both the eight-day EMA and the 21-day EMA, which is bullish, with the eight-day EMA also trending above the 21-day EMA.

On Thursday morning, while Qualcomm’s stock had almost filled the gap below, Nokia’s stock still had a substantial gap left behind. It is likely Nokia will fall down to fill that gap in the future.

Bulls want to see the gap filled to have more confidence that Nokia’s stock can continue to move higher. If Nokia can regain $4.86 as support, it could trade up to $5.14 before reaching another resistance level.

Bears want to see bearish volume continue to push Nokia’s stock lower to knock it down back under $4.32. If the stock loses that level of support, it could trade back down towards $3.92

Related Link: Is Now The Time To Buy Stock In Qualcomm Or Roku?

QCOM and NOK Price Action: Qualcomm was trading up 3.3% at $141.10. Shares of Nokia were trading up 8.4% at $4.56.