Key Takeout
- The Invesco QQQ Trust, which follows the Nasdaq 100, reached a new peak for the second consecutive day on Wednesday.
- The fund emerged from a flag pattern during trading on Tuesday, indicating potential for further gains.
- Technical analysis suggests an overhead target of about $575, while another method estimates it could reach $586.
- Investors should keep an eye on crucial support levels around $524 and $494 on QQQ charts.
The Invesco QQQ Trust (QQQ) achieved its highest close on Wednesday for the second day in a row as Tech Stocks maintained their upward momentum.
This fund, which tracks the Nasdaq 100 index, went through a rough patch earlier this year, losing around 25% from mid-February to early April. This decline was primarily due to worries about the significant AI investments from major tech firms and uncertainties regarding President Trump’s tariffs. However, it’s now regained those losses as trade concerns ease and overall corporate earnings show strength.
On Wednesday, QQQ saw a 0.3% increase, closing around $541. Since its launch in 2025, the fund has risen by 6%.
Next, let’s dive into the charts to see how the technology within QQQ is influencing prices.
Flag Pattern Breakout
After previously exceeding the neckline of a reverse head and shoulder pattern last month, the QQQ fund continued to rise before settling within a flag pattern just below its record highs. The breakout from this flag occurred during Tuesday’s session, setting the stage for more upward movement.
Interestingly, yesterday’s positive price movement accompanied a rise in the relative strength index. However, it’s worth noting that the indicators are currently below the buying level. This leaves ample room for the ETF to potentially continue its upward trend.
Using technical analysis on your QQQ charts can help project overhead price targets and identify two key support levels that investors should watch during any pullbacks.
Bar Pattern Overhead Target
To project possible overhead price targets, investors might consider using the bar pattern tool. This involves capturing price bars showing increased fund movement after breakouts from head and shoulder formations, then overlaying them from the breakout points of the flag pattern. This method suggests a price target near $575.
Measured Moving Overhead Target
Another strategy, often called the measured movement technique, looks at chart patterns to forecast future price trends. By assessing the distance from the bottom to the top of the inverse head and shoulder and adding that figure to the neckline, for instance, adding $92 to $494, a target of around $586 can be estimated.
Support Levels Worth Monitoring
If the fund retraces, it might first test support around $524, a level likely to attract buying interest based on the flag pattern’s foundational period formed back in late May.
A significant decline below this level could lead to a re-evaluation of lower support at $494. Investors may consider accumulating QQQ stocks around that point, which aligns with both the neckline of the reversed head and shoulder and a horizon line that connects a series of trading activities extending back to last September.
