Nasdaq QQQ ETF Needs Apple To Rebound To Catch The Market

Mar. 21, 2013 4:58 PM ETQQQ, SPY, IVV
Tom Lydon
78.35K Followers

By John Spence & Tom Lydon

The PowerShares QQQ Trust (QQQ), one of the most actively traded ETFs, has been lagging way behind the market ever since top holding Apple (AAPL) began its sharp pullback after topping out just above $700 a share in September 2012.

The Nasdaq-100 ETF is down 1% the past six months, versus a 7.5% advance for SPDR S&P 500 (SPY). Apple shares are down about 36% from their all-time high set last year.

Apple is still the largest stock in QQQ, which weights its holdings by market cap, at 13% of the portfolio. The ETF is comprised of the 100 largest nonfinancial stocks listed on the Nasdaq Stock Market and is seen as a liquid proxy to trade the tech sector.

Shares of Apple are higher for March and are testing the 50-day simple moving average, which has been a strong resistance line the past several months. If the stock can get back on track, it would provide a boost to QQQ given Apple's large weighting in the ETF.

On a positive note, Tarquin Coe, technical analyst at Investors Intelligence, points out the Nasdaq-100 fund has maintained a steady uptrend off its November low.

"We continue to see the fund as a catch-up candidate," he wrote in a newsletter. "The relative chart versus the S&P 500 is well positioned as it trades across a band which provided support in 2011. Turning up would kick off an outperformance run, something which could last weeks."

PowerShares QQQ

Apple

Full disclosure: Tom Lydon's clients own QQQ, SPY and AAPL.

Disclosure: I am long AAPL, QQQ, SPY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

This article was written by

78.35K Followers
Tom Lydon is editor and publisher of ETF Trends, a website with daily news and commentary about the fast-changing trends in the exchange traded fund (ETF) industry. Mr. Lydon is also CEO of Global Trends Investments, an investment advisory firm specializing in the creation of customized portfolios for high-net worth individuals. He has been involved in money management for more than 25 years. Mr. Lydon serves on the Board of Directors for U.S. Global Investors, Inc. and Guggenheim Investments. In early 2010, Mr. Lydon helped create the CNBC Model ETF Portfolios. Mr. Lydon is the author of The ETF Trend Following Playbook, as well as iMoney: Profitable Exchange-Traded Fund Strategies for Every Investor. He is Co-Founder of Virtual Summits, educational virtual events for financial advisors. Visit his site: ETF Trends (https://www.etftrends.com/) ETF Virtual The ETF Virtual Summit is the largest exchange traded fund (ETF) investment conference in the world. ETF Trends and RIA Database host this complimentary, interactive conference that exists completely online. The virtual showroom features keynote speakers, panel webinars, an exhibitor hall, a networking lounge and hot topic forums. Designed exclusively for Financial Advisors, this conference allows you to interact with experts in the ETF industry in a unique, virtual environment, avoiding the hassles and costs of traveling. Details on the conference, including agenda, past attendee statistics and sponsor information can be found at www.ETFVirtual.com. Alts Virtual The Alts Virtual Summit is the leading Alternative Investment conference for financial advisors. ETF Trends and RIA Database host this complimentary, interactive conference that exists completely online. The virtual showroom features keynote speakers, panel webinars, an exhibitor hall, a networking lounge and hot topic forums. Designed exclusively for Financial Advisors, this conference allows you to interact with experts in the Alternative Investment industry in a unique, virtual environment, avoiding the hassles and costs of traveling. Details on the conference, including agenda, past attendee statistics and sponsor information can be found at www.AltsVirtual.com.

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