Sign InSummary
On July 17, 2024, the ProShares UltraPro QQQ (TQQQ) plummeted by 8.79% to close at $74.15, with its high volatility and proximity to resistance levels hinting at potential bullish momentum if it breaks past $75.09, while positioning itself as a 'Hold' amidst a complex trading environment.
Technical Analysis
The ProShares UltraPro QQQ (TQQQ) experienced a significant decline of 8.79% on July 17, 2024, closing at $74.15. The day's trading saw a low of $74.09 and a high of $77.57, indicating considerable intraday volatility. The RSI14 stands at 49, suggesting that the stock is neither overbought nor oversold. The 50-day and 200-day moving averages are $69.62 and $54.90 respectively, showing a strong upward trend over a more extended period.
The MACD for the past three months reads 3.80, indicating a bullish trend albeit with recent price corrections. The Average True Range (ATR) is 4.17, reflecting high volatility which investors should be aware of. The support level is identified at $62.53, and the immediate resistance level is seen at $75.09. Given the recent price action, the stock hovers close to its resistance, and breaking past this could provide upward momentum.
Fundamental Analysis
TQQQ has a market cap of $21.39 billion and trades on the NASDAQ. As an exchange-traded fund (ETF) designed to triple the daily performance of the NASDAQ-100 index, it inherently carries higher risk and volatility. The volume on the last trading day was exceptionally high at 70.24 million shares compared to its average volume of 50.88 million, highlighting increased investor activity.
However, it's worth noting that TQQQ has no Earnings Per Share (EPS) figure and hence no Price-Earnings (PE) ratio available, as it is structured to provide leveraged returns on the index rather than traditional earnings. The ETF has a year-high of $85.20 and a year-low of $30.47, indicating a wide trading range reflective of its leverage and the corresponding higher volatility.
Performance Predictions
For the next trading day on July 18, 2024, TQQQ may see continued volatility. Given its proximity to the resistance at $75.09, breaking this level may signal a near-term bullish trend, yet failing to do so could indicate consolidation or a pull-back to support levels. Given the current data and recent price performance, expect a volatile trading range.
Over the upcoming week, if TQQQ can sustain trading above its 50-day moving average of $69.62, it is plausible that it may test its year-highs, provided the broader market conditions remain favorable. However, caution is warranted due to its inherent leverage and recent high volatility.
Intrinsic Value and Long-Term Investment Potential
As a leveraged ETF, TQQQ is designed for short-term trading and not typically recommended for long-term holding due to the risk of decay and volatility. The absence of EPS underscores its purpose rather than traditional value-based investment. Its intrinsic value is closely tied to the performance of the NASDAQ-100 index.
For long-term investors, the high risk and complex structure of TQQQ may not align with a conventional investment strategy. Instead, it is primarily suited for traders looking to capitalize on short-term market movements. The stock’s recent correction and proximity to resistance levels suggest volatility in the coming days. Holding the stock could be prudent for those who are already positioned, while new entrants might observe market behavior around key support and resistance markers. Given current indicators, the stock could be categorized as a 'Hold' for now.
