TQQQ Sees Bullish Momentum Amid Technical Strength but Caution Urged for Long-Term Investors

Technical Analysis

ProShares UltraPro QQQ (TQQQ) closed at $74.21 on June 6, 2025, up 2.86% from the previous session, signaling strong intraday momentum. The daily trading range was $73.54 to $75.01, with the price holding above both the 50-day moving average ($59.09) and the 200-day moving average ($71.62), indicating a bullish trend in medium and long-term contexts. The Relative Strength Index (RSI) stands at 57, suggesting neither overbought nor oversold conditions, allowing room for potential upward movement. The MACD value of 5.86 over three months confirms positive momentum, while the Average True Range (ATR) at 4.57 reflects moderate volatility. Volume at 64.90 million is below average daily volume (115.27 million), which may suggest a lack of conviction in the current rally or a quiet consolidation phase.

Support is strong at approximately $61.13, well below current prices, providing a significant downside buffer. The stop-loss level near $71.72 acts as a technical risk management threshold. There is no defined resistance level in the data, implying potential for further upside unless previously tested highs near the 52-week peak of $93.79 come into play.

For the next trading day (June 9, 2025), given the recent upward momentum coupled with RSI neutrality and positive MACD, a continuation of this bullish short-term trend is probable. Over the coming week, barring any market-wide shocks or sector-specific disruptions, price action is expected to test higher levels gradually, with potential consolidation above the 200-day moving average.

Fundamental Analysis

TQQQ is a leveraged ETF designed to deliver three times the daily returns of the NASDAQ-100 index. Given this structural nature, traditional fundamental metrics are less indicative of intrinsic valuation compared to stocks. However, the current P/E of 40.23 and trailing twelve months EPS of $1.84 provide a context relative to the underlying tech sector. The elevated P/E ratio aligns with the underlying index’s growth orientation and implies high expectations for future earnings growth.

Market capitalization at approximately $21.35 billion and shares outstanding near 288 million indicate a sizable fund with significant liquidity. Average volume remains robust, facilitating entry and exit with relatively low slippage in normal market conditions.

Intrinsic value for leveraged ETFs like TQQQ is primarily a function of the underlying index’s performance, the cost of leverage, and market sentiment. Given the current upward momentum in technology and growth sectors, the inherent magnification of returns by TQQQ can provide asymmetric gains during bullish runs but also elevated risk during downturns. Over the long term, structural drag caused by daily rebalancing and volatility decay must be considered, generally making TQQQ more suited for shorter-term tactical exposure rather than buy-and-hold strategies.

Long-term Investment Potential

TQQQ’s design to provide triple-leverage exposure to NASDAQ-100 yields high-growth potential in bullish market environments. However, volatility drag, compounding effects, and high expense ratios reduce its viability as a core long-term holding. Long-term investors seeking pure NASDAQ exposure may be better served by non-leveraged ETFs. TQQQ is more appropriate for active traders or tactical investors with strict risk controls.

Overall Evaluation

TQQQ currently exhibits strong technical momentum and a positive fundamental backdrop consistent with a growth-oriented index. The price remains above critical moving averages, RSI is neutral, and momentum indicators support further upside in the near term. However, the elevated P/E and leveraged nature of the ETF introduce significant risk if market conditions deteriorate. The structural characteristics limit long-term intrinsic value retention for passive holders.

Categorized as a Hold candidate, reflecting a balanced view: favorable short-term technical dynamics with caution warranted over longer holding periods due to inherent leverage risk and volatility decay. Investors monitoring for tactical gains could consider increased exposure, while those seeking durable long-term appreciation should consider alternatives.