January 20, 2011
Shares of the ETF Powershares QQQ Trust (NASDAQ: QQQQ) reversed from a new intra-day high in trading on Wednesday, January 19.
A trading day that reaches a higher intra-day high and lower intra-day low than the previous day, and closes near that low, is a bearish outside reversal day. Typically such days are followed with more losses.
The stock market and certainly the Q’s have been moving higher with almost no letup for two months. The Nasdaq 100 Index is very overbought and was due for a correction.
This may be the start.
There is strong support at the $55.03 level which was the high reached back on October 31, 2007. A decisive close below would point to this being the beginning of a corrective period lasting up to several weeks.
A reversal to the upside at or above $55.03 a share would signal a likely resumption of the rally.
The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy holds a position in the Powershares QQQ Trust.