QQQ LONG 1D - Timing the long side
Technical Analysis:
Invesco QQQ Trust (QQQ)
Timeframe: Daily
Chart Pattern: Oversold indicator EMA crossings
Breakout Level: $370
Target Price TW: N/A
**Breakout Point**: QQQ has surpassed a notable resistance level at $370, showing signs of a strong upward movement with the current price at $372.35, signaling a robust breakout.
**Indicators / Patterns**:
- **MACD (Moving Average Convergence Divergence)**: The MACD is trending bullish, which indicates a potential continuation of the upward trend.
- **RSI (Relative Strength Index)**: The RSI is approaching overbought territory, suggesting heightened buying activity.
- **Candlestick Patterns**: No relevant long in 1D timeframe, relevant in 4H
Signal: The script sets up the "WaveTrend with Crosses" indicator, authored by LazyBear. It uses moving averages of price data to calculate momentum and provides visual cues for potential reversals with overbought/oversold levels and line crossovers, used for signaling trade opportunities.
**Market Environment**:
- **Tech Sector Performance**: As a tech-heavy index, QQQ's performance is highly dependent on major tech stocks, which have been showing recovery in recent trading sessions.
- **Interest Rate Concerns**: With the Federal Reserve's stance on interest rates, tech stocks and QQQ may face volatility. Higher rates generally lead to valuation pressures on high-growth tech stocks.
**Fundamentals/Events**:
With the updated holdings information for QQQ as of April 24, 2024, let's re-integrate the EPS and revenue surprises into the analysis:
- **Microsoft (MSFT)**: Holding 8.86% weight in QQQ, Microsoft's EPS surprise of approximately 4.26% and a revenue surprise of around 1.67% can have a substantial impact on the QQQ index, as it's the largest holding and its financial performance exceeded expectations.
- **Alphabet C (GOOGL)** and **Alphabet A (GOOG)**: With a combined weight of 5.40% in QQQ, Alphabet's impressive EPS surprise of roughly 25.17% and a revenue surprise close to 2.35% indicate a strong positive momentum that could favorably affect the QQQ index given their significant presence.
- **T-Mobile US (TMUS)**: As a smaller weight of 1.47% in QQQ, T-Mobile's mixed financial performance, featuring an EPS surprise of about 6.95% but a slight revenue dip of -1.06%, might have a nuanced effect on the index. The better-than-expected EPS could be positive, but the revenue shortfall may temper the impact.
These percentage surprises should be factored into the overall analysis of QQQ as they reflect the financial performances of some of its key constituents, potentially impacting the index's movement.
- **Economic Indicators**: Key economic releases (e.g., employment data, inflation reports) in the coming weeks could impact investor sentiment and market dynamics, affecting QQQ.
Macroeconomic data that could be factored into the analysis of the QQQ index:
- **GDP (PIL Trimestrale) for the U.S.**: The GDP growth rate is indicated as 1.6% for the latest quarter, which is below the previous rate of 2.5% and significantly lower than the rate before that, which was 3.4%. A decelerating GDP growth rate may lead to concerns about the economic health of the U.S. and potentially impact investor sentiment towards market indices, including QQQ, particularly those with substantial tech holdings that might be sensitive to economic slowdowns.
- **Initial Jobless Claims (Richieste iniziali di sussidi di disoccupazione)**: The number stands at 207K, which is slightly below the previous figure of 214K and just below the pre-previous of 212K. This indicates relative stability in the job market, which could counterbalance some of the negative sentiment arising from the slower GDP growth, offering a mixed macroeconomic context for QQQ.
- **Fed Rate Cut Probability**: 35% chance of only one or no rate cuts by the Fed this year.
**Opportunity**:
- **Sector Recovery**: If tech giants continue to post strong results and outlooks, QQQ could see sustained upward momentum. Still waiting for Amazon and Nvidia results next week.
- **Market Sentiment**: Positive developments in AI and cloud computing, automated assistants, particularly benefiting tech stocks.
**Risks**:
- **Tech Sector Volatility**: Sudden shifts in tech stock performances or regulatory challenges could lead to increased volatility.
- **Breakout Failure**: Similar to a stock, QQQ could fail to maintain levels above $400 and retreat, indicating a false breakout or consolidation phase.
**Disclaimer**:
This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their own research or consult a financial advisor before making any investment decisions.
Invesco QQQ Trust (QQQ)
Timeframe: Daily
Chart Pattern: Oversold indicator EMA crossings
Breakout Level: $370
Target Price TW: N/A
**Breakout Point**: QQQ has surpassed a notable resistance level at $370, showing signs of a strong upward movement with the current price at $372.35, signaling a robust breakout.
**Indicators / Patterns**:
- **MACD (Moving Average Convergence Divergence)**: The MACD is trending bullish, which indicates a potential continuation of the upward trend.
- **RSI (Relative Strength Index)**: The RSI is approaching overbought territory, suggesting heightened buying activity.
- **Candlestick Patterns**: No relevant long in 1D timeframe, relevant in 4H
Signal: The script sets up the "WaveTrend with Crosses" indicator, authored by LazyBear. It uses moving averages of price data to calculate momentum and provides visual cues for potential reversals with overbought/oversold levels and line crossovers, used for signaling trade opportunities.
**Market Environment**:
- **Tech Sector Performance**: As a tech-heavy index, QQQ's performance is highly dependent on major tech stocks, which have been showing recovery in recent trading sessions.
- **Interest Rate Concerns**: With the Federal Reserve's stance on interest rates, tech stocks and QQQ may face volatility. Higher rates generally lead to valuation pressures on high-growth tech stocks.
**Fundamentals/Events**:
With the updated holdings information for QQQ as of April 24, 2024, let's re-integrate the EPS and revenue surprises into the analysis:
- **Microsoft (MSFT)**: Holding 8.86% weight in QQQ, Microsoft's EPS surprise of approximately 4.26% and a revenue surprise of around 1.67% can have a substantial impact on the QQQ index, as it's the largest holding and its financial performance exceeded expectations.
- **Alphabet C (GOOGL)** and **Alphabet A (GOOG)**: With a combined weight of 5.40% in QQQ, Alphabet's impressive EPS surprise of roughly 25.17% and a revenue surprise close to 2.35% indicate a strong positive momentum that could favorably affect the QQQ index given their significant presence.
- **T-Mobile US (TMUS)**: As a smaller weight of 1.47% in QQQ, T-Mobile's mixed financial performance, featuring an EPS surprise of about 6.95% but a slight revenue dip of -1.06%, might have a nuanced effect on the index. The better-than-expected EPS could be positive, but the revenue shortfall may temper the impact.
These percentage surprises should be factored into the overall analysis of QQQ as they reflect the financial performances of some of its key constituents, potentially impacting the index's movement.
- **Economic Indicators**: Key economic releases (e.g., employment data, inflation reports) in the coming weeks could impact investor sentiment and market dynamics, affecting QQQ.
Macroeconomic data that could be factored into the analysis of the QQQ index:
- **GDP (PIL Trimestrale) for the U.S.**: The GDP growth rate is indicated as 1.6% for the latest quarter, which is below the previous rate of 2.5% and significantly lower than the rate before that, which was 3.4%. A decelerating GDP growth rate may lead to concerns about the economic health of the U.S. and potentially impact investor sentiment towards market indices, including QQQ, particularly those with substantial tech holdings that might be sensitive to economic slowdowns.
- **Initial Jobless Claims (Richieste iniziali di sussidi di disoccupazione)**: The number stands at 207K, which is slightly below the previous figure of 214K and just below the pre-previous of 212K. This indicates relative stability in the job market, which could counterbalance some of the negative sentiment arising from the slower GDP growth, offering a mixed macroeconomic context for QQQ.
- **Fed Rate Cut Probability**: 35% chance of only one or no rate cuts by the Fed this year.
**Opportunity**:
- **Sector Recovery**: If tech giants continue to post strong results and outlooks, QQQ could see sustained upward momentum. Still waiting for Amazon and Nvidia results next week.
- **Market Sentiment**: Positive developments in AI and cloud computing, automated assistants, particularly benefiting tech stocks.
**Risks**:
- **Tech Sector Volatility**: Sudden shifts in tech stock performances or regulatory challenges could lead to increased volatility.
- **Breakout Failure**: Similar to a stock, QQQ could fail to maintain levels above $400 and retreat, indicating a false breakout or consolidation phase.
**Disclaimer**:
This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their own research or consult a financial advisor before making any investment decisions.