Since its recent peak on 15th November 2022, the price of QQQ drifted lower by about 4%. Currently, it trades for around 282$. We continue to be bearish on the Nasdaq 100 index and pay close attention to market developments. To support our bearish thesis, we would like to see QQQ continue to hold below the immediate support/resistance. Additionally, we would like to see a pick-up in volume accompanying a price decline. Contrarily, if QQQ breaks above the immediate support/resistance, it will be bullish.
As far as fundamental factors go, these support our bearish thesis on the macroeconomic level. The FED and other central banks are pursuing tighter economic conditions to beat high inflation, which will inadvertently slow down the economy even more. With that in mind, we dismiss that the primary downtrend has hit bottom. Accordingly, our price targets for QQQ stay at 280$ and 270$ (10 000$ for NQ1!).
Illustration 1.01 The setup we introduced recently remains valid.
Technical analysis - daily time frame RSI, MACD, and Stochastic are neutral. DM+ and DM- are bullish. Overall, the daily time is neutral.
Technical analysis - weekly time frame Stochastic points to the upside. MACD also points to the upside but stays in the bearish zone. RSI is neutral. DM+ and DM- are bearish. Overall, the weekly time frame is neutral.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Dagangan aktif
⋅
A breakout below the immediate support/resistance became invalidated. Therefore, our price targets are on hold. They will become active once again when the price breaks below the level. Otherwise, we will stay on the sidelines.
Dagangan aktif
⋅
As noted before, the setup remains valid, with price targets becoming active again.
Great post! Though I fundmentally agree with your thesis/analysis, I believe it neglects the possibility of another pop before a sharp decline. The economic reports are showing support of the Fed slowing which in the near will give momentum towards the bullish sentiment before the market realizes how slow the economy as become and a reminder of how long will the Fed keep the these rates in place. So really more chop til mid Jan?
Tradersweekly
⋅
@jpayne6394, It is hard to tell. That is why in Illustration 1.02, you can see that as far as the price holds above 284.18$, it is relatively bullish. However, the price has been choppy around this level for about a week now. We will see what will happen today once FED minutes come out. But generally, we would have thought if the rally was due to continue, it would already (instead of showing signs of exhaustion and a declining volume through each session). These elevated prices also allow the FED to tighten more aggressively, which is not particularly bullish in the big picture.
SquishTrade
⋅
@Tradersweekly, Good point about the rising market allowing the Fed more room to tighten. In a sense, the bear rallies (and the bottom pickers who help them along) really help the bear case.