PowerShares QQQ : Nasdaq 100 (QQQQ)

Company

QQQQ 1-year chart QQQQ 1-year chart

"PowerShares QQQ™ seeks to replicate the NASDAQ-100 Index®, which includes 100 of the largest, most innovative non-financial companies that trade on the NASDAQ Stock Market®. Formerly known as the NASDAQ-100 Index Tracking Stock® or QQQ, PowerShares QQQ™ gained its popularity through investment professionals, private investors and more recently, financial advisors." (company website)

QQQQ 6-month chart
QQQQ 6-month chart

Sell short

1-Dec-08. Following President-elect Obama's announcement of his economic team, the markets rallied, bringing all the ETFs that I follow to a test of the down-trend resistance line, with all overbought. The question, then, was whether they would break out above the resistance line or fail the test and and continue downward. This morning, after the post-Thanksgiving sales were in, the market gave its prediction — the downtrend will continue. Accordingly, I sold short.

  • Percentage price oscillator (PPO) — above signal line due to recent rally
  • Volume — declining gradually since mid-October

Based on technical analysis, MarketEdge calls QQQQ an "avoid" in a "strong downward trend."

Buy to cover

gain Bottom line
½%

2-Dec-08. Right idea, poor execution. When the market opened, QQQQ was way down and it looked like another dreary day on Wall Street (but I was short!); I went for a leisurely coffee. Bad mistake. When I came back, QQQQ was almost back up to my selling price. I covered quickly to avoid a loss, but left a nice profit on the table.