NDX/QQQ Outlook
$NASDAQ 100 Index(.NDX.US$ $Invesco QQQ Trust(QQQ.US$
With the current volatile markets, what should you be expecting next week? There have been people calling for santa rally and also some who are calling for a correction. Sometimes technical analysis can let us know where the market might head towards.
With the current volatile markets, what should you be expecting next week? There have been people calling for santa rally and also some who are calling for a correction. Sometimes technical analysis can let us know where the market might head towards.
QQQ has formed the Head & Shoulders last week as I mentioned on 30th Nov if we do not close above the previous day close and instead head down, we will be looking to form a H&S pattern. True enough on tuesday 29th nov, the market closed lower forming the right shoulder as seen on my chart. On wednesday it broke the neckline and retested it on thursday and friday which both failed to break above. You can see from the chart below.
This has confirmed the head & shoulders pattern and we should be looking at more downside to the NDX/QQQ. On friday close, QQQ has retested the 383 critical support which was the previous all time high and rested above on close. But if the H&S pattern was valid, this critical support should not hold as H&S is usually a reversal of trend and we should be looking at a deeper scale pullback rather than just a 6% fall from the all time high. There is still a gap below at 360s which we created on the recent rally and that might likely get filled this time round.
However, technical analysis is only to assist you on the support and resistance and also to likely know where the market is heading towards. Any major catalyst can change the market direction without any regard to the current technicals. Thus we still have to look forward to the week ahead and take note of the support and resistance levels to see a clearer picture where the market is likely headed towards.
On Weekly chart which is macro view of QQQ, we can see that we have barely touched the 20SMA and there is a lot more room to the downside at the bottom of the bollinger band at 350 levels.
Ultimately the market has barely had any huge corrections this year despite the huge gains and it will not be surprising to see a 15% - 20% correction on the QQQ before we push any further. It is best to stay defensive at this moment as VIX is above the 26 levels. But as the macro trend is still bullish. You have to stay nimble as if a reversal is to come, it will come quickly and that would be your signal to enter for the next rally.
As always, trade safe & invest wise!
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Investing 101 OP : Do subscribe to my new YouTube channel for your once a week TA and market outlook!
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. thank you so much for sharing.
Jensen Philanthropy : Bro there's a likely 7.5% downside to QQQ by 15th of December..... I am betting on PUTS
Investing 101 OP Jensen Philanthropy : I also feel QQQ still has downside. At least until 360 to cover the bottom gap. After that will have to monitor where is the bottom. I still have not closed my puts.
Jensen Philanthropy Investing 101 OP : How long to expiry are you puts? My risk tolerance is higher, i usually open weeklies and close during mid week, once i hit my TP i just walk away
Jensen Philanthropy : Your puts*
Investing 101 OP Jensen Philanthropy : I usually play longer term expiry but I close on short term. I buy 1 to 2 months out. But usually hold for 1 to 2 weeks and close them