Can the Q’s Break This Area of Resistance for Good?

12/17/2009 12:01 am EST

Focus: ETFS

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

Frank Kollar is editor and chief analyst at, 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.

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