The Nasdaq and formerly high-flying tech stocks in it have been under heavy scrutiny the past couple of weeks after a major sell-off. But I see a bullish setup coming in the Nasdaq QQQ ETF that trades under the ticker Invesco QQQ Trust Series 1 (Nasdaq: QQQ).
Last week, in a members-only video, I noted that the Nasdaq QQQ ETF was building a bullish, head and shoulder continuation pattern…
A head and shoulder continuation pattern is two similarly sized peaks surrounding a middle, higher (or lower) peak. The shoulder peaks or valleys form what is called the neckline, and the head is in the middle.
This pattern is one of the most reliable indicators we use when doing technical analysis of a stock.
Looking at the low from March 5, that is the head of the pattern.
If the Nasdaq QQQ ETF breaks above the $324.45-ish level, that will trigger a technical breakout from this smaller-sized head and shoulder continuation pattern. And if it breaks above the 50-day moving average, that will also be a bullish signal that prices are going to move higher.
But if it goes lower and takes out the low of the head and shoulder continuation pattern… all bullish bets are off the table.
If we get the bullish breakout that appears to be forming, the next level of resistance is at the previous high hit back in February.
What does it all mean?
Check out my short video and let’s discuss the Nasdaq QQQ ETF, and the potential I see for a bullish breakout to the upside.
And as always, please like and subscribe to our YouTube channel and podcast, “Smart Money Circle,” where I interview some of the most brilliant minds in the business. You can also follow me on Twitter, and read more of my thoughts on the market at WealthPress and on Forbes, where I’m also a contributor.
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