What's The Downside Risk For QQQ? Playing A Leadership Rotation From Growth To Value
Portfolio Pulse from David Keller
The Nasdaq 100 ETF (QQQ) is showing signs of potential downside risk, with indicators like bearish momentum divergences, weakening breadth, and the Bullish Percent Index signaling a shift. Technical analysis tools such as the 50-day moving average, Chandelier exits, and Fibonacci retracements are used to anticipate potential support levels and downside targets. Mega cap growth stocks like TSLA and AAPL have already shown weakness, suggesting limited upside for QQQ until conditions improve.
March 19, 2024 | 3:59 pm
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NEGATIVE IMPACT
AAPL's recent performance is contributing to the bearish outlook for QQQ, as it is one of the mega cap growth stocks showing signs of breakdown.
AAPL, similar to TSLA, is mentioned as a key factor in the potential downside risk for QQQ. As a major component of the Nasdaq 100, AAPL's weakness is indicative of broader market challenges and contributes to the bearish momentum divergences and weakening breadth that signal a limited upside for QQQ.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 70
NEGATIVE IMPACT
QQQ is showing signs of potential downside risk due to bearish momentum divergences, weakening breadth, and a declining Bullish Percent Index. Technical analysis suggests key support levels and downside targets.
The article outlines several technical indicators pointing towards a potential downside for QQQ, including bearish momentum divergences, a weakening Bullish Percent Index, and key technical levels such as the 50-day moving average and Fibonacci retracements. Given the current technical setup and the weakness in mega cap stocks like TSLA and AAPL, there's a higher likelihood of QQQ experiencing a pullback in the short term.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
TSLA, as a mega cap growth stock, has shown weakness recently, which contributes to the limited upside potential for QQQ.
TSLA's weakness is highlighted as a contributing factor to the broader downside risk for QQQ. Given TSLA's significant weight in the Nasdaq 100, its performance can have a substantial impact on the overall direction of QQQ. The article suggests that the weakness in TSLA and similar stocks is a key factor in the deteriorating market breadth and potential for further downside in QQQ.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 70