Strategic Chaos or Tactical Goldmine? What QQQ’s Chart is Whispering Proper Now | Do not Ignore This Chart!

Regardless of the uncertainty prevailing within the markets, the Nasdaq 100 Index ($NDX) has confirmed resilient, maybe extra so than its peer benchmarks. The 90-day commerce truce between the U.S. and China, initiated in Might, boosted investor confidence. But that is now in danger amid mutual accusations of violations.

Nonetheless, markets rallied on Tuesday morning after information that April job openings, one of some key reviews main as much as Friday’s jobs report, have been higher than anticipated. Nonetheless, indicators of weakening demand, rising deficits, and declining CEO confidence recommend the financial system stays fragile.

Why QQQ Might Be Value Watching Proper Now

In gentle of the present surroundings, is it price including positions to Invesco QQQ Belief (QQQ), an $NDX proxy?

Shifting over to the StockCharts Market Abstract web page, you may see simply how effectively $NDX is performing.

$NDX Breadth Metrics Reveal Bullish Participation

FIGURE 1. BREADTH AND BPI PANELS ON THE MARKET SUMMARY PAGE. Whereas different indexes are rising more and more bullish, you may see how the $NDX stands out.

Analyzing the Breadth panel on the left and zooming in on the transferring averages, the $NDX has essentially the most shares buying and selling above the 200-day easy transferring common (SMA), a bullish sign contemplating that breadth of participation is crucial when gauging the efficiency of an index. On the best panel, one other breadth studying — the Bullish P.c Index (BPI) — tells you that 76% of the shares within the index are triggering Level & Determine Purchase Indicators, supplying you with one other angle on breadth, which occurs to be in alignment.

Now that you have seen how $NDX is outperforming when it comes to breadth, you are most likely interested by what number of shares are hitting new highs relative to the opposite indexes. Additionally, are there any specific standout subsectors or industries?

The New Highs panel can assist reply each questions.

FIGURE 2. MARKET SUMMARY NEW HIGHS PANEL. The $NDX leads throughout the board, which asks the following query: Are there any standout sectors or industries represented inside the index?

The $NDX has the best share of shares hitting new highs. If you happen to click on the Nasdaq 100 hyperlink, it’s going to convey up a listing of shares within the index. Those with a StockCharts Technical Rank (SCTR) rating above 90 are listed under.

FIGURE 3. $NDX STOCKS WITH SCTR SCORES ABOVE 90. It is a combined bag when it comes to business.

The combination of subsectors and industries signifies there isn’t any one specific grouping (like all semiconductors or all AI shares) main the index. The $NDX’s outperformance is distributed throughout totally different areas.

So, again to the unique query: is it price getting into or including positions to QQQ?

Strategically, the outlook is murky. Geopolitical tensions and coverage reversals can shift the market panorama in a single day. However tactically, technical indicators might supply potential entry factors if you already know the place to look.

QQQ Weekly Chart: A Technical Rebound With Caveats

Let’s begin with a broader view of QQQ, which is the probably funding automobile for many who wish to go lengthy the $NDX. Here is a weekly chart.

FIGURE 4. WEEKLY CHART OF QQQ. The ETF sharply recovered from a steep drop, however is there sufficient investor conviction to interrupt above, and even take a look at, its all-time excessive?

You possibly can see how QQQ recovered sharply from its drop during the last quarter. Whereas it is buying and selling above its 40-week SMA (equal to the 200-day SMA), you may as well see how the 10-week SMA (or 50-day SMA equal) has fallen under it. Is it a false Loss of life Cross sign, or is it indicating that the QQQ might not have sufficient momentum or investor conviction to check and break above its all-time excessive?

Zooming In: Key Assist and Resistance Ranges

To get a clearer image, let’s zoom in on a day by day chart.

This chart reveals QQQ’s restoration intimately. There are a number of technical options converging to recommend crucial assist and resistance areas.

FIGURE 5. DAILY CHART OF QQQ. The important thing zones are highlighted. Now it is a matter of seeing what QQQ does subsequent.

Here is a breakdown of the important thing issues to observe:

• Be aware the lengthy Quantity-by-Worth ranges (on the left) and the way they correspond to the green- and yellow-shaded areas, indicating a excessive focus of buying and selling exercise which might serve (or has served) as assist and resistance.
• The inexperienced vary is the place QQQ’s worth is at present hovering, and the query is whether or not the ETF can break above it, opening up a path to check its all-time highs, or whether or not it’s going to fall additional.
• The house between the 200-day SMA and the yellow-shaded space marks a crucial assist vary. QQQ has revered the 200-day SMA earlier than, bouncing off it as worth examined the extent (blue arrows).
• The yellow-shaded space, one other assist vary, marks a convergence of historic swing highs and lows (see blue arrows), serving as each resistance and assist. It is also one other space of concentrated buying and selling exercise.

If QQQ falls under the inexperienced space, failing to advance increased, then you may anticipate assist on the 200-day SMA (close to $495) or the yellow-shaded vary ($465 – $470). Beneath that, there’s one other assist vary (shaded in pink) close to $430, however a decline to this stage may also recommend weak point in investor conviction.

Thus far, the Relative Power Index (RSI) is just under the 70-line, indicating room to run ought to there be sufficient momentum to advance it. Nevertheless, the Chaikin Cash Stream (CMF), although effectively above the zero line, reveals that purchasing stress could also be dwindling a bit, sufficient to observe carefully, since quantity typically precedes worth path.

On the Shut

The Nasdaq 100 could also be navigating a messy macro backdrop, however its breadth, momentum, and management present promise. Strategically, the terrain is unsure. Tactically? The charts recommend a sensible setup for many who want to lean into power.

Disclaimer: This weblog is for instructional functions solely and shouldn’t be construed as monetary recommendation. The concepts and methods ought to by no means be used with out first assessing your private and monetary scenario, or with out consulting a monetary skilled.