QQQ stays properly above the rising 200-day SMA, however clearly shifted from bullish to bearish over the past two months. Right now’s report/video will present this momentum shift and analyze the short-term continuation sample taking form.
A Key Momentum Indicator Shifts from Bullish to Bearish for QQQ
The chart under exhibits QQQ buying and selling properly above the rising 200-day SMA. We may make the case for a long-term uptrend, however the rapid pattern is down. QQQ shaped a decrease excessive from July to September and a decrease low from August to September. So far as I’m involved, the trail of least resistance is down.
I’m additionally bearish as a result of RSI shifted from a bullish vary to a bearish vary. RSI usually ranges from 40 to 80 throughout uptrends (inexperienced shading) and from 20 to 60 in downtrends (purple shading). Discover how RSI broke above 60 in mid January after which ranged from 40 to 60 throughout the bull run from mid January to mid August. RSI broke this vary in mid August and the 50-60 zone turns into momentum resistance (purple shading).
Quick-term, QQQ fell sharply in September after which consolidated with a pennant taking form. Pennants are short-term continuation patterns that get their buying and selling bias from the prior transfer, which was down. This pennant is a bearish continuation sample and a break would goal a transfer in the direction of the 200-day SMA. I lined this pennant in Thursday’s Chart Dealer report and video.
This week in Chart Dealer: We launched a short-term breadth mannequin designed to establish oversold circumstances and sign upturns. It’s presently oversold and remaining oversold. Every Chart Dealer report and video additionally consists of buying and selling setups for shares and ETFs. An 8-day trial is accessible.
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Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic method of figuring out pattern, discovering alerts inside the pattern, and setting key value ranges has made him an esteemed market technician. Arthur has written articles for quite a few monetary publications together with Barrons and Shares & Commodities Journal. Along with his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Enterprise Faculty at Metropolis College in London.
