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Technical Analysis On PowerShares QQQ (QQQQ)

By Steve Zappa

After starting my computer early this morning I sat prepared to lay down the trade.

The trade was a buy on a tech sector company. Inside minutes the technology corporation I was watching was up good on intensifying volume.

I was in the trade on the long side quickly.

I got up and went to the bathroom and brushed my teeth. After I returned to my trading desk, I just about coughed up the water I was drinking all over my keyboard.

In seconds I was behind 3%, then 5%, then 6%…

If you bought a technology stock today, then the same thing happened to you.

It was the grandmother of all headfakes and it had my nickname in black and white all over it: sap!

In this video, I take a peek at the technology sector and the vile bloodshed that happened today by looking at the chart of QQQQ in four different time frames.

Looking at the weekly chart of QQQQ, you had the 8 week moving average crossing below the 13 and 21 week MAs but it is not be frightened time. Not until the 13 week joins the 8 week in going below the 21 week moving average need we begin to worry. The weekly chart shows that QQQQ is still within a very weak uptrend. The key support level we don’t want broke is $45.

The daily chart of QQQQ appears chilling with that Bearish Engulfing candlestick that took shape today. Keep in mind that this is just one candlestick. Also you can not just focus on the plunge today without as well focusing on the very positive gap up open. Also the moving average lines are still widening giving us the bullish alligator mouth opening pattern.

The hourly chart of QQQ reveals that the support established on Wednesday, June 16, 2010 held as massive buying took place right off this $46.30 support line. We need this support level to hold on the hourly chart. The 8 hour MA line broke beneath both the 34 and 55 hour MAs but the 34 hour moving average is still above the 55 hour moving average. We took technical damage today, no doubt. But the hourly chart says that we are still within a very weak uptrend on QQQQ.

The 15 minute chart reveals that at around 11:45 AM Pacific time, great selling happened as proof from the stair pattern on the volume as a greater and greater amount of sellers stepped in and bailed out of this market. But then something especially bullish took place. In the last hour of trading, great buying took place off the $46.30 mark. In fact, more buying took place in the last hour than in the previous hour. This massive amount of buying saved the technology sector today and kept it in a very weak uptrend rating.

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Article Citation
MLA Style Citation:
Zappa, Steve "Technical Analysis On PowerShares QQQ (QQQQ)." Technical Analysis On PowerShares QQQ (QQQQ). 2 Jul. 2010. 30 Jul 2014 <>.

APA Style Citation:
Zappa, S (2010, July 2). Technical Analysis On PowerShares QQQ (QQQQ). Retrieved July 30, 2014, from

Chicago Style Citation:
Zappa, Steve "Technical Analysis On PowerShares QQQ (QQQQ)"

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