Technology has been on fire. I publish a free daily scan for bullish stocks based on momentum and other factors and it has been dominated by technology names for several months. The PowerShares QQQ Trust Series 1 (NASDAQ:QQQ) has been the benefactor of this move. It started higher out of consolidation in December and ran to new all-time highs. It finally took a pause at the end of February to digest those gains for 2 months. But no pullback, just sideways consolidation.
At the end of April it started higher again. This move met resistance at 140 and pulled back. For 1 day. It felt like the world was going to end Wednesday last week when the NASDAQ pulled back more than 2.5% in one day. But it was just one day and it has reversed and is moving higher again. Wednesday (yesterday) it made a new all-time high and is moving higher in the pre-market Thursday. How high can it go? Recent activity gives two cases for 145.50 to 146 on this leg.
The move out of consolidation in December to the consolidation in February gives a target to 146 on a Measured Move. And the move out of the April sideways action to the peak in May added back to the bottom last week suggests 145.50. Both are very bullish. Momentum has reset lower as well, not that hot momentum has been a problem for the NASDAQ 100. It rose 5% each of the last two times AFTER it became technically overbought. Technology and the NASDAQ 100 has been the leader and it looks to continue. Keep some money there.
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