By Relmor Demitrius
Coming off the long holiday and the non official end of the trading summer, investors will come back into an equities market that has seen some significant gains last week. However, certain sectors are definitely lagging this move back up. I think technology stocks are one of these sectors and broad exposure right now might be the way to go. I see strength in the Power Shares QQQ (NASDAQ:QQQQ), which tracks the Nasdaq-100 Index. This technology and media heavy index should begin coming alive entering its traditionally stronger season. September hasn’t always been a good month for tech stocks but after the beating this index has taken this summer, there are some juicy picks that bottom feeders are going to lap up. Be careful when picking the dogs from the quality stocks in this group, so I am going to make it easy on you for now. Let’s see which Nasdaq-100 stocks recover the best. Maybe other Nasdaq technology stocks will lead the way. For now, a general play on the QQQ is in order.
Since the QQQ has come off a large move last week and the mains have been very volatile lately, let’s go ahead and make sure we have a stop loss around the $44.30 line. If this line doesn’t break we could see over $47 by the end of the week. We don’t want to get buried in a bad trade here. For the range lately this is still a relatively high price. No need to run full blown into any commitments here.
Looking at the chart above we see a bullish crossover on the MACD lines. It is still under the zero line (another bullish indicator when crossing back over it) but moving up nicely from Friday. The QQQ did indeed gap up on Friday and close over the 200 day moving average, and a back test before continuing further is possibly in order. I would make sure this test held before making a trade here. I like the support levels at $42.50 (very strong) and the $44.30 area as mentioned above. After a test to $42.50 in early June, I think this stock still gets good movement off that hit. I do not see it retesting the $42.50 line before higher than where it is now. Last hit could cause a breakout over the $48 area.
Last week I recommended a possible trade on Syntroleum Corporation (NASDAQ:SYNM). I saw oil holding strong and moving up last week and wanted exposure to oil, but I wanted a high beta play as well to maximize any move. This allowed a 10% gain when oil barely up ticked. Weeks range was $1.50 to $1.61, with the buy recommendation coming on $1.50 line holding. This article among others can be found on our home page.
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Disclosure: No Position QQQQ
