TQQQ Shows Bullish Momentum and Potential Upside, But High Risks Demand Cautious Investment Approach

Technical Analysis

ProShares UltraPro QQQ (TQQQ) closed at $78.10 on June 24, 2025, posting a solid intraday gain of 4.55%. The stock traded between $76.66 and $78.51, staying above its 50-day moving average of $63.59 and below the 200-day moving average of $71.95, indicating a recent bullish momentum that is beginning to test longer-term resistance zones. The RSI14 at 61 points to moderate bullishness without overbought conditions, suggesting room for continued upward movement. With a positive MACD of 2.59 over the past three months, the trend remains favorable. Intraday volatility, measured by ATR at approximately $4.05, suggests potential for price swings but within manageable ranges. The immediate stop-loss level is set around $75.54, while key support lies near $67.94 with no clear resistance, implying a potential for further upside.

For the next trading day (June 25, 2025), price continuation above the $75.50 stop-loss zone and above the 50-day MA suggests likely further appreciation toward the recent high near $78.50 or beyond. Over the upcoming week, assuming supportive market conditions for leveraged tech ETFs, the absence of resistance and a strong volume profile (albeit currently below 50% of average daily volume) provide a technical framework for testing near-term highs and possibly challenging the yearly peak of $93.79.

Fundamental Analysis

TQQQ, a triple-leveraged ETF based on the Nasdaq-100 index, exhibits a high PE ratio of 33.91 relative to historical averages, driven by its leveraged exposure and amplified volatility. The trailing twelve months (TTM) EPS stands at $2.30, indicating profitability, but the valuation multiples reflect speculative, high-growth priced expectations in the underlying tech sector rather than stable earnings. Market capitalization at approximately $25.45 billion aligns with its ETF structure and investor interest in leveraged ETFs. Share volume is substantial, though trading currently below its 110 million average suggests some cautious participant activity.

Intrinsic value calculation is challenging due to the triple leverage and ETF structure; however, given the underlying Nasdaq-100 index's strong fundamentals and continuing tech sector momentum, the structural long-term growth outlook remains intact. The high PE ratio is expected given the product type, but long-term holders should be aware of heightened risk and decay effects associated with leveraged ETFs, especially during sideways or volatile markets.

For long-term investment potential, TQQQ is better suited as a tactical vehicle for short- to medium-term exposure rather than a buy-and-hold asset. The fund’s structure inherently limits its suitability for long-term holds due to daily rebalancing and compounding effects that can erode value in volatile periods.

Intrinsic Value and Long-Term Outlook

While the underlying Nasdaq-100 index is supported by solid fundamentals, TQQQ’s leveraged nature introduces significant risk and volatility, which detracts from intrinsic value stability. Intrinsic valuation should consider expected tech sector growth but adjust heavily for risk premium related to leverage and decay. Investors seeking exposure must factor in the expected erosion during non-trending markets and elevated volatility dynamics. Long-term intrinsic value appreciation is feasible if the Nasdaq-100 index continues its secular uptrend, but returns will be nonlinear and require active management monitoring.

Overall Evaluation

TQQQ currently trades in a technically bullish phase with moderate momentum signals and proximity to recent highs, signaling near-term strength. Fundamentally, it reflects a high-risk, high-reward leveraged product whose valuation multiples are inflated by design and not comparable to traditional equities. Institutional and speculative interest remains robust given the active volume and positive momentum indicators, although full-volume support is lacking presently.

Category: Hold. The stock demonstrates constructive technical momentum and positive short-term catalysts, but the structural risks and absence of intrinsic value stability suggest caution for holding beyond tactical periods. TQQQ’s leveraged profile favors active, short- to medium-term trading rather than long-term passive investment.