Gains in the Nasdaq have helped propel the QQQ stock price to its latest all-time high. Can the passive-investors favourite keep going up? It just might.
The Invesco Exchange-Traded QQQ fund (NASDAQ: QQQ) started the week in the green, closing at $368.49, up by $0.29 (+0.08%).
The fund, which tracks the Nasdaq, offers investors a great way to access the growth stocks that have enjoyed a seemingly unstoppable since March of last year.
QQQ stock has returned investors over 125% in the past 16 months. Although much of those gains came in 2020, and so far this year, QQQ is higher by 17.43%.
However, there are encouraging signs that 2021 may soon play catch up to 2020.
Last week, I outlined how the tech index was breaking out of a long-term uptrend. Furthermore, the last time this happened was in 1998, before the Nasdaq 100 rallied 250% over the following year.
Of course, this marked the top of the tech bubble of the late 1990s, and it’s maybe optimistic to consider a similar scenario now. However, it reinforces my belief that new highs often lead to new -highs.
And whilst QQQ stock has performed well in the last year, the climb has been relatively orderly. We have yet to see a melt-up in 2021.
But could one be on the cards?
The Monthly price chart highlights that QQQ has respected a strong uptrend since 2010. If the price closes above $367.00 at the end of this week, it will confirm last months trend breakout.
This should lead to a price extension on the upside.
However, investor confidence, as well as potential risks, remain high. And that can be a dangerous mix.
If the price succumbs to a downside shock, the first level of support is seen at $315.00. Here the 50-month moving average lines up with the March low.
My bullish theory remains valid as long as the price sustains $315.00. However, the outlook turns sharply negative on a monthly close below this level.