Key To Stock Market Strength Is The Performance Of Invesco QQQ

The Invesco QQQ Trust ETF (QQQ) represents the stocks in the Nasdaq 100. Its important to track the daily and weekly charts for this ETF. The daily chart shows that the ETF failed at its 200-day simple moving average at $369.27. Weakness on April 7 has held its 50-day SMA and annual pivot at $349.28 and $349.22. The weekly chart has been positive but that will change if Friday’s close is below its five-week modified moving average at $352.51.

The Daily Chart for QQQ

The daily chart for QQQ shows that the index had been above a golden cross 52 weeks ago. This led to the November 22, 2021, high of $408.71. This day was a negative key reversal day. This occurred when the day’s close of $399.30 was below the Friday November 19, 2021, low of $402.58. From this November 22 high to the March 14, 2022 of $317.45, QQQ fell by 22.3%.

On March 2 there was a death cross where the 50-day simple moving average declined below the 200-day simple moving average. Strength since the March 14 low failed around its 200-day SMA, now at $369.27.

Weakness today, April 7 has been just below its 50-day simple moving average and annual pivot at $349.26 and $349.22. The annual pivot is the lowest horizontal line.

The horizontal lines at $380.01 and 385.74 are monthly and semiannual risky levels, respectively.

The Weekly Chart for QQQ

The weekly chart for QQQ had been positive since the week of March 18. This will change to neutral given a close this week below the five-week modified moving average at $352.35. QQQ is well above its 200-week simple moving average, or “reversion to the mean” at $256.70.

The 12x3x3 weekly slow stochastic reading is rising at 40.77. This measure scales between 00.00 and 100.00 where readings above 80.00 are overbought and readings below 20.00 are oversold. Note that this reading stayed above 20.00 in recent weeks.

Trading Strategy: If you buy QQQ at the annual pivot at $349.22 consider a sell stop below the January 24 low of $334.15. Reduce holdings on strength to the semiannual risky level at $385.74.