April 28, 2010
Shares of the ETF Powershares QQQ Trust (NASDAQ: QQQQ) reached a strong resistance level at $50.61 which was the bear market rally high reached on June 5, 2008. This was the high point in the most powerful bear market rally of 2008 and as such it marks a strong level of resistance.
On Tuesday, April 27, stock markets around the world, as well as in the United States, took a tumble. The Q’s had closed right at $50.41 the day before, and took a 2% decline on Tuesday. Of course the entire market declined, but the Q’s had reached this important resistance level four days previously and had so far been unable to surpass it.
For the Q’s resistance has for now turned back this advance.
There is initial support at $48.57, which was the bear market rally high reached on August 15, 2008. The Q’s surpassed this level three weeks ago and should find buyers there.
The 50-day moving average is just below this at $47.92 and should also offer support. However, should the Q’s close below $47.92, they could easily drop to the $46.00 level in coming weeks. This was the January 2010 high reached before a significant correction began.
Disclosure: The Fibtimer.com (www.fibtimer.com) ETF Timing Strategy holds a position in the Powershares QQQ Trust.