ProShares UltraPro QQQ (TQQQ) Shows Promising Outlook Amid Bullish Technical Indicators, 1 month ago Technical Analysis

ProShares UltraPro QQQ (TQQQ), which aims to provide 3 times the daily performance of the NASDAQ-100 Index, closed the last trading session at $50.34, exhibiting slight growth of 0.12% from the previous closing price. Over the past trading day, TQQQ traded between $49.84 and $50.98, suggesting a reasonable intraday volatility. The Relative Strength Index (RSI) stands at 51, indicating a neutral momentum without leaning towards overbought or oversold conditions.

The 50-day moving average (MA) of TQQQ stands at $44.89, while the 200-day MA is observed at $38.23, both well below the current price, signifying a bullish trend over these periods. A significant momentum signal is recognized in the Moving Average Convergence Divergence (MACD), with a value of 1.71. This positive MACD suggests that TQQQ has been gaining momentum in recent months.

Furthermore, the Average True Range (ATR) of 3.36 points to volatility over the past 14 days, an important factor for risk assessment. With the current price hovering just marginally above the resistance level of $50.35, there might be a breakout on the upside if the momentum continues. However, traders would want to keep an eye on the designated stop-loss at $48.38 to manage risk for any unexpected downturns.

Fundamental Analysis

TQQQ, with a market capitalization of $20.98 billion and 416.82 million shares outstanding, presents an opportunity linked directly to the tech-heavy NASDAQ-100 Index's performance. Given that the earnings per share (EPS) is currently at 0 and the Price to Earnings (PE) ratio is nonexistent, investors are mainly focused on the growth prospects of the underlying index constituents rather than traditional valuation metrics.

The relatively high trading volume, although below the average volume, suggests that the ETF remains popular among traders looking to leverage market movements. In terms of year-on-year growth, TQQQ has made a notable recovery from its year low of $18.58, an optimistic sign for traders seeking strong bullish trends.

TQQQ Predictions for Next Trading Day and Week

Given the proximity to the resistance level of $50.35 and the minor gains in the previous session, TQQQ could be poised for a potential breakout if the wider market conditions remain favorable. The positive technical indicators suggest that the bullish trend may prevail, at least in the short term. For the next trading day on January 16, 2024, and for the upcoming week, barring any unforeseen negative market news or economic indicators, the outlook for TQQQ appears promising.

However, investors will closely monitor external factors including economic data releases, industry-specific news, and broader market sentiment, all of which can heavily influence the performance of leveraged ETFs such as TQQQ due to their amplified exposure to market movements.

Overall Evaluation

Considering the bullish technical indicators, including the position above both the 50-day and 200-day MAs and the positive MACD, TQQQ appears to be on an uptrend. The foundation of this performance is the recovery of the NASDAQ-100 index from previous lows, signaling increased investor confidence in the technology sector.

Therefore, the overall evaluation of TQQQ for investors is a 'Hold' with potential 'Buy' considerations for those with higher risk tolerance seeking to capitalize on the leverage provided. The positive momentum and uptrend provide a favorable condition for holding the ETF, while the risks associated with its leveraged nature and inherent market volatility should be managed with appropriate risk mitigation strategies, such as stop-loss orders.

Investors are encouraged to keep a close watch on upcoming economic data, corporate earnings reports from technology companies, and any shifts in market sentiment to refine their investment decisions. Thus, based on the current analysis, TQQQ could be viewed as a hold, with opportunities for buying if the NASDAQ-100 continues its upward trajectory. However, due to ETFs' leveraged nature, any investment should be accompanied by strict risk management protocols.

Check full TQQQ forecast and analysis here.