Diggin’ Into the QQQ’s

• Posted by Greg Harmon
• on May 29th, 2014

The Nasdaq 100 ETF, $QQQ, has in many regards been the laggard index since the tech bubble and crash 14 years ago. Where the S&P 500 ($SPY), Russell 2000 ($IWM), and Dow Industrials ($DIA) have all made new all time highs the QQQ still has a long way to go to make a new high. But just because it has lagged does not mean it is a place to avoid investing. Take a technical look.

First the potential. The weekly chart above shows the break of the red consolidation zone in 2013 and a run to the February highs. But the recent pullback measures on a AB=CD pattern to about 113. The other indicators of the chart above show a rising RSI and a MACD about to cross up. These support more upside and create a buy signal. But lets look a bit closer. The correction period preceding the last leg higher is nearly identical in both duration and magnitude to the one completed 6 weeks ago. And with the price action now retesting the prior top, a push higher is a buyable trigger. Are you ready to hop on board?

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