QQQ to $392Trading Pattern
QQQ has formed an ascending channel which may prove to be very lucrative for derivative trading. Utilizing Elliott Impulse and Correction Waves within the support and resistance lines, Wave 4 may dip as low as $392 which is a few dollars shy of a 61.8% Fibonacci retracement level.
Technical Indicators
A bearish RSI divergence has been present since the share price surpassed $400; the RSI highs retain a negative slope while the share price highs have a positive slope (both reflected in yellow). This supports the Elliott Wave Theory and ascending channel pattern as the share price is currently at, or soon approaching, the crest of Wave 3 as well as the ascending channel resistance line.
QQQ may experience a slight bump upwards indicated by the RSI line (green) which appears to be close to crossing the MA line (red) from beneath. However, due to its close proximity to overbought territory, I believe selling pressure will begin soon after as might be indicated by the MACD.
The MACD technical indicator shows a tightly wound MACD line (green) and Signal line (red). The MACD line is within dangerous territory of crossing its Signal line from above which is a bearish indicator and suggests an increase in selling pressure followed by a correction in share value.
