Sign InTQQQ Analysis: Short-term Downturn Expected, But Bullish Trend to Continue
Summary
On June 21, 2023, ProShares UltraPro QQQ closed at USD 38.85 with a change of -4.31%, but based on its technical and fundamental analysis, the ETF may continue its overall uptrend and range between 39-41 USD by the end of the week, leading to a final evaluation of a Buy.
Introduction
ProShares UltraPro QQQ (Ticker: TQQQ) is a leveraged ETF focused on the performance of the NASDAQ-100 Index. On June 21, 2023, its last close was at 38.85 USD, with a change of -1.75 (-4.31%). The ETF has ranged between a low of 16.1 USD and a high of 42.44 USD within the past year. This analysis will consider the technical and fundamental aspects of TQQQ to predict its stock price for June 22, 2023, and the upcoming week, along with a final evaluation of the stock.
Technical Analysis
The relative strength index (RSI) is currently at 65, indicating that the stock is in an overbought territory but not far from the normal range. With a 50-day moving average of 31.28 and a 200-day moving average of 24.42, TQQQ has exhibited a bullish trend over the past months. The 3-month MACD is also at 3.28, indicating increasing bullish momentum.
Volume for TQQQ has been close to average, with 99.08 million shares traded on the last trading day, compared to an average volume of 119.20 million shares.
Fundamental Analysis
TQQQ has received attention from various news sources, with some praising its performance and others expressing caution. The ETF was highlighted among the five best leveraged ETFs of the new bull market, driven by the tech-heavy Nasdaq Composite Index, solid earnings, and hopes of the end of the Federal Reserve's rate-hiking cycle. Some analysts believe that the bull market in tech stocks is not yet over, maintaining a strong buy recommendation despite the fact that the stock is overbought.
Although TQQQ has been performing well, there is an opposing view that the market is too risky for speculation on TQQQ. It is essential to consider these differing perspectives in making investment decisions.
Short-Term Prediction: June 22, 2023
Considering TQQQ's technical indicators, the stock may experience some consolidation in the short-term. The overbought RSI and the recent decrease in price may lead to a slight downturn on June 22, 2023. However, positive investor sentiment and the continued bullish trend suggest that the stock may remain relatively resilient, potentially hovering around the 38-39 USD mark for the next trading day.
Upcoming Week Prediction
For the upcoming week, TQQQ is likely to continue its overall uptrend, with the possibility of minor pullbacks and consolidation during the week. The stock price may be driven by market sentiment, economic data, and tech performance. If TQQQ remains within its current trajectory, the stock price may range between 39-41 USD by the end of the week, depending on market conditions.
Final Evaluation
In light of TQQQ's strong performance, bullish trend, and considering the current market conditions, the stock can be categorized as a Buy. Investors should monitor the market for any potential risks and weigh the benefits of a leveraged ETF against their investment goals and risk tolerance.
