Shares of the ETF Powershares QQQ Trust (QQQQ) rallied to the $44.60 level in mid-November. After a month, they have been unable to surpass these highs even after several attempts.
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The bullish side is that there have been two minor corrections during this time frame and the second correction ended at a higher low. This creates a wedge shape pattern that likely has predictive results when broken.
A lower low than the rising trend support line created by drawing a line through the November 27 and December 9 lows would forecast lower lows for the next several days to weeks.
A decisive close above $44.60, the horizontal resistance line, would be a breakout for the Nasdaq 100 Q’s and forecast a run to the next resistance level, which is all the way up at $48.64, the 78.6% retracement level for the entire 2008-2009 bear market decline.
There is minor resistance at $45.78, which should be surpassed if the Nasdaq 100 Q’s can break out. Two weeks ago, we looked at this level as a possible critical resistance, but as time goes by and the Nasdaq 100 Q’s hold near their highs, we see a breakout as likely to blow past this number and continue higher.
By Frank Kollar of FibTimer.com
Frank Kollar is editor and chief analyst at FibTimer.com, which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF, and stock trading strategies.
