Stock Incubator

[dalcindo]

Re: QQQQ - Critical Technical Point Reached; Chart expected to unwind from 2009's sustained rally.

Since early March 2009, QQQQ has left a winding trail of white candles reminiscent of the plume of smoke left behind a rocket aiming straight for the moon. "Houston, we had lift-off!!!", indeed. Now comes the long-expected earth's gravitational pull, IMHO.

Again, my unsolicited 2-cent chatter:

(See: 60-month, WEEKLY chart below)

Factors playing IN SUPPORT OF expected decline are:
- Fundamentals: USD is expected to continue its rally, stressing US markets downwards
- Technicals: Price reached a critical technical point, testing the upper border of bearish channel; favors retracement to 42.5 area, IMHO.


Factors playing AGAINST expected decline are:
- Fundamentals: NFP data release tomorrow, expected flat or better-than expected, supporting a continued rally in the market (especially DJIA);
- Technicals: WEEKLY price's 5,9,21-EMAs remain in bullish spread; 45-EMA about to cross over 200-EMA; Weekly 14-RSI still resides over the 70-level; A/D and OBV lines show no sign of buyers disinterest as indicators remain over their 21-EMA.

Overall:
- WEEKLY chart has primary and secondary indicators taut to the overbought side, increasing likelihood of price to unwind.
- Likely support: 42.5
- Likely Resistance: Upper border of bearish channel (i.e.: current levels); next resistance level = 47.5 if market plays out against current technical expectations, IMHO.

QQQQ - 60-month, WEEKLY chart:


- Dalcindo


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QQQQ Feb 2010 44.0000 put (QQQNR)
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