Reduce Holdings On Invesco QQQ With A Monthly Pivot For June At $347.24

The Invesco QQQ

QQQ
Trust ETF (QQQ) represents the stocks in the Nasdaq 100. The daily chart for this ETF shows that QQQ has tested its monthly pivot for June 2023 at $347.24. My analytics favored this latest move higher given the golden cross that was confirmed back on March 14, 2023 with the ETF at $297.37. Remember that a golden cross occurs when the 50-day simple moving average jumps above the 200-day simple moving average.

The Daily Chart for QQQ

Courtesy of Refinitiv XENITH

The daily chart for QQQ shows that the ETF traded as high as $408.71 on November 22, 2021. This day ended with a sell signal known as a key reversal. The close that day at $399.19 was below the November 19, 2021 low of $402.58.

On March 2, 2022 a death cross was confirmed when the 50-day simple moving average fell below the 200-day simple moving average. After a low of $317,45 on March 14, 2022 strength failed at the 200-day SMA at $368.70 on March 29, 2022. This solidified the downside risk to the October 13, 2022 low of $254.26. This day was a key reversal buy signal as the close of $268.82 was above the October 12 high of $265.36.

QQQ returned to its 200-day SMA when it was $292.50 on January 27. 2023. Then, on March 14, 2023, with the ETF at $297.37, a golden cross formed when the 50-day SMA rose above the 200-day SMA. The ETF has been influenced by this buy signal since then to the test of the monthly pivot at $347.24 this week.

The horizontal lines from low to high are the quarterly pivot at $331.64, the annual pivot at $340.55, the monthly pivot at $347.24, and the semiannual risky level at $399.41.

The Weekly Chart for QQQ

Courtesy of Refinitiv XENITH

The weekly chart for QQQ is positive and extremely overbought. The ETF is above its five-week modified moving average at $330.92. It’s also well above the 200-week simple moving average, or ‘reversion to the mean’ is at $293.49.

The 12x3x3 weekly slow stochastic reading is extremely overbought at 95.73. This measure scales between 00.00 and 100.00 where readings above 80.00 are overbought and readings below 20.00 are oversold. The reading of 95.73 is above 90.00 which I consider a parabolic bubble.

Trading Strategy: Buy QQQ on weakness to its 200-day simple moving average at $296.05. Reduce holdings now with the monthly pivot at $347.24. Then reduce the position further on strength to its semiannual risky level at $399.41.