PowerShares QQQ (QQQ) — This ETF, which is designed to track the Nasdaq 100 index, rallied to its 50-day moving average at $97.96 from a bullish deep “V.”
However, the volatile QQQs, which contain highly visible tech stockssuch as Apple (AAPL), Microsoft (MSFT), Google (GOOGL, GOOG), Gilead Sciences (GILD), Facebook (FB), Amazon.com (AMZN), Cisco Systems (CSCO) and Qualcomm (QCOM), may falter as a result of lower volume.
Although it reversed from below its 200-day moving average at $92.20 and the important August low around $94, it is now up against overhead that stretches from August to late September.
Even though MACD is flashing a buy signal, I suspect this is due to lower upside volume. QQQ is unlikely to overcome the potential sellers lurking just above its 50-day moving average.
If you own this ETF with a profitable trade on your hands, I’d cash in. On the other hand, if you have been eyeing it as a buy, wait for a pullback to $94 before jumping in. Because of its volatility, I’d place a good ’til cancelled (GTC) order to buy at that level with a trading target of $105.
QQQ has a 12-month yield of 1.4% and a low expense ratio of 0.2%.