Sign InQQQ Price Analysis and Recommendations: Hold Position Despite Imminent Rebalancing
Summary
As of July 11, 2023, the Invesco QQQ Trust (QQQ) is priced at 368.17 USD, with potential for continued growth given its robust earnings and positive sentiment, and while some volatility may be expected due to an upcoming rebalancing event, the recommendation for QQQ would be a Hold.
Fundamental Analysis
The Invesco QQQ Trust (Ticker: QQQ) is an ETF listed on the NASDAQ. As of the last close on July 11, 2023, the stock is priced at 368.17 USD. The price has seen a change of 1.81 USD (0.49%) in the preceding trading session. The ETF has been trading between 364.62 and 368.63 USD with a market capitalization of $146.69 billion. Its year-high and year-low stand at 374.19 and 254.26 USD, respectively.
In terms of liquidity, QQQ has a volume of approximately 54 million, which is slightly higher than its average volume of 51.91 million, indicating an active interest in the ETF among traders and investors.
QQQ had a reported earnings per share (EPS) of 12.26 and a Price-to-Earnings (PE) ratio of 30.43, indicating potential for continued growth given the robust earnings. Additionally, the outstanding shares stand at approximately 393.10 million.
Looking at the technical indicators, the 50-day moving average at 347.52 puts the ETF notoriously above the short-term trendline, which usually signals a stronger bullish sentiment. The 200-day moving average is at 303.59, implying that QQQ is trading healthily above this long-term trendline as well, consolidating its uptrend. The Relative Strength Index (RSI14) indicates a neutral position at 52, suggesting the ETF is not currently overbought or oversold. Meanwhile, the moving average convergence/divergence (MACD 3-month) is 5.75, implying a bullish sentiment among investors.
News and Considerations
One major factor that may sway the ETF's price is the upcoming rebalancing of the NASDAQ-100 index on July 24, 2023. This adjustment is aimed at addressing overconcentration issues caused by several large technology stocks. This could potentially lead to some short-term volatility for QQQ, as it will affect the weights and constituents of the ETF.
Moreover, some analysts believe QQQ is a superior choice compared to other ETFs due to its consistent performance and higher technology exposure. This comes in light of expectations of a sector rotation from growth to value stocks. This endorsement may bolster confidence among existing investors and attract new investors.
Forecast and Recommendation
Based on these factors, and considering the consensus, high, low, and median target of 18.33, 20, 15, and 20 USD, respectively, it is expected that the price for the next trading day could realistically be around 18-20 USD.
As for the upcoming week, considering all factors including the imminence of NASDAQ-100 rebalancing, it is posited that some volatility could be expected. However, with the robust fundamental indicators and positive sentiment towards QQQ’s composition, modest uptrend could be expected within a 20-22 USD range.
Based on the encouraging factors in the fundamental and technical analysis, combined with the overall optimism suggested in recent news, the recommendation for the Invesco QQQ Trust (QQQ) would be a Hold. While the market faces some degree of uncertainty due to the upcoming rebalancing event, QQQ's solid fundamentals and positive sentiment suggest a risk-balanced, potential for positive returns in the longer term. Invesco QQQ Trust continues to be a sound choice for exposure to the technology sector and NASDAQ-100 index, despite potential near-term volatility resulting from the index's rebalancing.
