Qualcomm Breaks Down But RSI Signals It’s Severely Oversold

Key Points

• Qualcomm shares hit their lowest level since Tuesday, November 2023.
• RSI at 25 marks the most oversold reading since 2021, a historic inflection point.
• Recent dividend hike shows confidence ahead of this month's highly anticipated earnings.

After months of pressure, Qualcomm Inc. NASDAQ: QCOM has officially cracked and fallen below $150.

Shares sank to fresh multi-month lows on Monday, falling back to levels last seen in November 2023. 

With markets in chaos thanks to tariff fears and mounting geopolitical tensions, investors have been selling first and asking questions later.

The tech giant has now dropped more than 25% from its February high, and yet, even in this brutal environment, there are signs the tide may soon turn.

RSI Signals a Rare Oversold Setup

A key technical indicator is now flashing a signal that should be on every trader's radar. Qualcomm's relative strength index (RSI) closed yesterday at 25, putting it deep into oversold territory.

The RSI measures the speed and magnitude of recent price movements to identify whether a stock is overbought or oversold. Readings above 70 typically suggest a stock is extremely overbought, while readings below 30 indicate it is extremely oversold. A reading of 25 tends to be unsustainable, which means the intense selling pressure may soon be reaching an exhaustion point.

What makes this particularly interesting is the historical precedent. The last time Qualcomm's RSI dropped this low was in October 2021. What happened next? The stock rallied 55% in the following months. There's no guarantee history repeats, but in markets like these, patterns like that deserve a closer look.

A Vote of Confidence Hidden in Plain Sight

Even as the share price has been under pressure, Qualcomm's management is clearly feeling confident about the company's trajectory.

Last month, they raised their dividend, one of the strongest signals a company can send to the market.

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A dividend hike isn't just about returning capital to shareholders—it's a public commitment to future cash flow.

If there's any risk they won't be able to maintain the higher payout, they'll avoid the move entirely.

That decision suggests Qualcomm sees its earnings remaining strong over the coming quarters.

With the company already reporting solid results in its last earnings print, the pieces may fall into place for a sentiment reversal.

Earnings Are the Next Big Catalyst

All eyes are now on Qualcomm's next earnings report at the end of the month. The company beat expectations in its previous report and still felt confident enough to reward shareholders with that dividend increase. If they can deliver another clean set of numbers, the current sell-off could quickly look like a serious overreaction.

Until then, every session is worth watching. Monday's price action was particularly telling; despite the early plunge, Qualcomm bounced more than 13% off the lows before the close. That kind of reversal intraday signals there's demand waiting in the wings, especially at these levels.

What Happens Next

The wider market will play a role here. If the S&P 500 continues to slide, Qualcomm could face more pressure. But at these levels, the risk-reward is shifting. Technical indicators suggest the stock is overly stretched to the downside, while fundamental signals like the dividend hike show internal confidence. With earnings looming, this could prove to be a textbook oversold bounce.

Final Thoughts

Qualcomm's chart looks ugly, but not without promise. An RSI reading of 25, the lowest since late 2021, combined with a strong dividend move and signs of demand at the lows, offers a compelling setup for those willing to step in early. With earnings around the corner, the next few weeks could decide whether this is just a pause in the downtrend or the beginning of a powerful comeback.