SINCE JANUARY, Invesco QQQ Trust Series 1 (NASDAQ: QQQ) has risen 23.7% as tech companies listed on the Nasdaq exchange rallied higher.
However, some significant pullbacks lasted for a few weeks at a time, followed by significant rallies, as seen on the daily chart below.
The last pullback lasted from early September to early October and was followed by the latest rally phase until late November.
QQQ’s rally was driven by large-cap companies such as Apple, Google, Facebook, and Microsoft, which have been in long term uptrends lifting the Nasdaq index, which is tracked by the QQQ ETF.
However, not all tech companies have been doing well. Smaller tech companies have struggled to keep up with their larger peers and could face significant challenges if the Federal Reserve implements hawkish policies to accelerate the tapering process.
Investors keenly watch the Fed’s next move at Thursday’s monetary policy meeting. The Fed is expected to unveil hawkish policies, triggering a further downtrend in the Nasdaq index and the QQQ ETF.
QQQ shares are currently in a downtrend that started on November 22, 2021, and appeared to bottom on December 3, 2021, when a small rally ensued. However, the downtrend is not yet over, as evidenced by yesterday’s decline.
Investors should regard the downtrend as over once QQQ shares surge above the November 22 highs. Meanwhile, investors interested in profiting from the move higher may find QQQ’s current stock price quite attractive.
The timing of the next rally phase may take a while given that we must first get a crossover of the 20-day EMA above the 50-day EMA, which is yet to happen, indicating that we could be in for a further decline or a sideways trending market.
*This is not investment advice. Always do your due diligence before making investment decisions.
QQQ stock price.
The Invesco QQQ Trust has seen its shares fall 1.65% in one month but is still up 23.7% since January.
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