Pullback Imminent For Nasdaq 100: Outlining Four Potential Scenarios For The QQQ
Portfolio Pulse from David Keller
David Keller, CMT, outlines four potential scenarios for the Nasdaq 100, represented by the QQQ ETF, following a divergence in performance between the S&P 500 and Nasdaq 100, with the latter showing signs of potential pullback due to overbought conditions in growth stocks like NFLX and GOOGL. The scenarios range from very bullish to super bearish, with probabilities assigned to each. Keller's base case is a mildly bullish scenario with a 60% probability, suggesting a pullback followed by a rally. The article is for educational purposes and does not constitute financial advice.
December 04, 2023 | 5:05 pm
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NEGATIVE IMPACT
GOOGL has shown signs of upside exhaustion, which may lead to a short-term pullback in its stock price.
GOOGL is mentioned as one of the mega cap growth stocks that has dropped after showing signs of upside exhaustion, which is a bearish signal for its short-term stock price movement.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
NFLX, a mega cap growth stock, is highlighted as overbought and may need to reset before continuing its uptrend, indicating a potential short-term pullback.
NFLX is directly mentioned as an example of a growth stock that is overbought, which typically precedes a pullback. Given its status as a major player in the technology sector, its stock price is likely to be sensitive to such analyst observations in the short term.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
QQQ, representing the Nasdaq 100, may face a pullback due to overbought conditions in growth stocks. Keller's base case suggests a short-term pullback before a potential rally, with a 60% probability.
The QQQ ETF is likely to be impacted in the short term by the potential pullback in growth stocks, as indicated by the analyst's base case scenario. The ETF's performance is closely tied to the tech-heavy Nasdaq 100 index, which includes stocks like NFLX and GOOGL that are showing signs of overbought conditions.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90