QQQ: Outperformance Could Be Around The Corner - Don't Give Up Now

Summary

  • The QQQ ETF has underperformed the S&P 500 over the past year. Its recovery momentum has also languished behind the S&P 500 at the recent October bottom.
  • Despite that, we discuss why investors can remain optimistic, as significant pessimism has likely been baked into QQQ's relative underperformance.
  • We highlight why QQQ's leading sectors and company constituents could outperform the downgraded analysts' estimates in 2023.
  • But note that the Fed could still spoil the recovery party here if it decides to turn more aggressive at the upcoming December FOMC meeting.
  • Maintain Buy.
  • I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

Bear Market

DNY59

Thesis

The Invesco QQQ ETF (NASDAQ:QQQ) has underperformed the S&P 500 ETF (SPY) (VOO) since we updated its bottoming process in early October. We noted that investors have remained tentative over the more

QQQ/SPY price chart (weekly)

QQQ/SPY price chart (weekly) (TradingView)

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Disclosure: I/we have a beneficial long position in the shares of AMZN, TSLA, AMD, NVDA, META, GOOGL, MSFT, QCOM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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