January 26, 2010
Shares of the ETF Powershares QQQ Trust (NASDAQ: QQQQ) declined to strong support last Friday, January 22. Will this widely traded ETF now rally?
The Powershares QQQ reached the 50% retracement of the November 2009-January 2010 rally at the close last Friday. Typically this support level either slows a decline or results in a reversal day if the ETF is going to begin a new advance.
On the flip side, if shares move lower on Tuesday or break below $43.60, traders can look for continues declines to the $40.06 level.
This is the Fib 61.8% retracement support and it is critical to the rally. If shares close below $40.06, look for a full blown correction lasting several weeks at least.
Again, if shares reverse at $40.06, a new advance could begin.
Disclosure: The Fibtimer.com (www.fibtimer.com) Stock Timing Strategy holds a position in the Powershares QQQ Trust.