Key Takeaways
- The Invesco QQQ Trust came into Tuesday’s session at its highest ever level as investors await earnings reports this week from major technology companies.
- After breaking out from a flag pattern late last month, QQQ’s price has continued its move into price discovery.
- The measured move technique, which calculates the distance of the trend higher that immediately preceded the flag and adds that amount to the pattern’s breakout area, forecasts a near-term price target of $589.
- Investors should monitor crucial support levels on QQQ’s chart around $540 and $515.
The Invesco QQQ Trust (QQQ) is trading at record high levels as investors await earnings reports this week from several major technology companies
EV maker Tesla (TSLA) and Google parent Alphabet (GOOGL) and computing giant IBM (IBM) are due to report quarterly results after the closing bell Wednesday, while embattled chipmaker Intel (INTC) is scheduled to release its earnings reports late Thursday.
The QQQ, which tracks the performance of the tech-heavy Nasdaq 100 Index, has received a boost in recent months from improved sentiment surrounding technology stocks as concerns about tariffs have eased and economic data reports have remained strong.
Through Monday’s close, the ETF had rebounded 40% from its early-April low and was up 10% since the start of the year. The QQQ was down slightly at around $563 in the opening minutes of Tuesday’s session.
Below, we break down the technicals on QQQ’s chart and identify price levels that investors will likely be watching.
Price Discovery
After breaking out from a flag pattern late last month, QQQ’s price has continued its move into price discovery. Importantly, the breakout coincided with the 50-day moving average (MA) crossing above the 200-day MA to form a golden cross, a bullish chart signal that indicates the start of a new uptrend.
Moreover, the relative strength index has remained near its overbought threshold since early May, confirming the fund’s strong price momentum.
Let’s apply technical analysis to forecast a near-term overhead target worth watching if the fund’s price continues making new highs and also identify support levels to monitor during future retracements.
Measured Move Near-Term Price Target
Investors can forecast a near-term overhead price target by using the measured move technique, also known by chart watchers as the measuring principle.
When applying the analysis to QQQ’s chart, we calculate the distance of the trend higher that immediately preceded the flag and add that amount to the pattern’s breakout area. For example, we add $53 to $536, which projects a bullish target of $589, about 4% above Monday’s closing price.
Support Levels to Monitor
During retracements, it’s initially worth monitoring the $540 level. This area, just above the rising 50-day MA, would likely attract strong buying interest near the top of the flag pattern and two prominent peaks that formed on the chart in December and February.
Finally, a more significant pullback in the QQQs could see the price revisit lower support around $515. Investors may look for entry points in this location near a trendline that links a range of corresponding price action on the chart between November and June.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above securities.