Powershares Nasdaq 100 QQQ Trust (NYSE: QQQ) Confirms Rally
Seeking Alpha Analyst Since 2009
April 25, 2011
Shares of the ETF Powershares Nasdaq 100 QQQ Trust (NYSE: QQQ) broke above its declining trend resistance line in Wednesday’s April 20 rally. This line was the upper line of a pennant pattern that we wrote above previously and which, when broken, would point to the direction of the Q’s in coming weeks.
A rising line drawn from the March 16 lows through the April 18 lows and continued to the right on a daily chart creates a rising trend support line.
Connecting the February 16 and April 4 highs in the same way and extending the line to the right creates a declining trend resistance line. This is a pennant pattern.
A break of either of these lines (closing price) would likely be followed by a continued move in the direction of the break.
Typically, when a pennant pattern forms after a long term advance, the break is to the upside. On Thursday, April 21, the Q’s gapped higher at the open and rallied again into the close. This confirmed the prior day’s breakout of the pennant formation.
The Q’s still need to close above their prior rally high at $58.88, about 1% higher. But this holiday shortened week has pointed to higher highs for the Q’s.
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in the Powershares Nasdaq 100 QQQ Trust.
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