NASDAQ Set To Reach New Records
Tech stocks tend to get a good portion of the market’s attention whenever we are talking about the blue chip space in equities. This is because companies like Apple (AAPL, Financial), Google (GOOG, Financial), FaceBook (FB, Financial) and Tesla Motors (TSLA, Financial) have consistently created some of the most innovative and consumer-friendly products of the last decade. But when investors are looking for a broader way to play this space as a whole, it makes a good deal of sense to monitor activity in the NASDAQ 100. This tech-heavy index is one of the most broadly diversified tools enabling investors the establish positions in the sector while limiting volatility and capturing the potential for capital gains.
In terms of specifically tradable instruments, this means that traders should constantly watch the PowerShares QQQ Trust ETF (QQQ, Financial), which has had a very impressive run so far this year. To be sure, momentum has started to slow in recent months, but now that we are coming back into the highs that were hit during the tech bubble of 1999, we can see there there is strong potential for further gains as long as corporate earnings result continue to surpass market expectations.
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PowerShares QQQ Trust ETF (NASDAQ:QQQ)
Critical Resistance:111
Critical Support: 105
Trading Stance: Buy on Dips
(Chart Source: CornerTrader)
NASDAQ 100 / QQQ - Stock Trading Strategy: Momentum remains positive even if it is starting to slow. Overall strategy is still looking to buy on dips as long as support at 105 holds steady.
On the surface, it may appear as though QQQ is starting to slow in its bull run, but it is still too early to anticipate any major declines any time soon. The bias does reverse if we start to see major breaks of support and the first level to watch at this stage comes in at 105. Traders looking to establish positions from the long side can use this area as a tradable support levels, placing stop losses just below the 100 psychological mark. To the topside, the first profit target can now be found at 111 and trades can be partially closed as we approach this area. Overall, this is still strong agreement between the technical outlook and the fundamental outlook, so the consistency supports the overall bias to remain long even with the slowing momentum that now looks apparent in the market.
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