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Powershares QQQ Trust (NASDAQ: QQQQ) Tests Support

|Includes: PowerShares QQQ Trust ETF (QQQ)

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.