The QQQ share price has made a strong recovery this month as investors focus on earnings and a potential Fed pivot. It has risen to a high of $278, which was the highest level since October 6 and is about 10% above the lowest level this month. Invesco QQQ has crashed by more than 30% from the highest level this year.
Has the Nasdaq 100 bottomed?
Invesco QQQ is one of the biggest ETFs in the world with over $147 billion in assets and an expense ratio of 0.20%. It tracks the Nasdaq 100 index, which is one of the best-known indices in the United States. As a result, the two have a very close correlation.
The QQQ share price will be in the spotlight as some of its biggest constituent companies are set to publish their quarterly results. Alphabet, Microsoft, and Visa will publish their results on Tuesday. Economists expect these results to be relatively mild since companies slashed their spending in Q3.
The other key QQQ constituent that will publish their results this week are Meta Platforms and Twitter. Meanwhile, other key American companies like Boeing, Coca-Cola, Biogen, and Archer-Daniels-Midland will publish their results.
Meanwhile, the QQQ stock price will react to signs of a Federal Reserve pivot. The Fed has delivered several rate hikes this year and pushed the headline figure up by 300 basis points. Analysts expect that the bank will deliver another 75 basis points increase in November followed by 50 basis points in December. Some analysts believe that it will then pause its rate hikes in 2023 to observe the impact of this year’s hikes. A Fed pivot is highly bullish for tech companies.
QQQ share price forecast
The daily chart shows that the QQQ stock price crashed to a multi-month low of $254 this month. It has then staged a strong recovery as the earnings season gets underway and as hopes of a Fed pivot rises. The index has dropped below all moving averages while the Relative Strength Index (RSI) has formed a bullish divergence pattern. It also formed a bullish engulfing pattern.
Therefore, the QQQ ETF will likely resume the bearish trend since it has formed an inverted cup and handle pattern. If this happens, the next key level to watch will be at $254, which was the lowest level this year. A move above the resistance point at $280 will invalidate the bearish view.