2024-06-11 20:02:55 ET
Summary
- Invesco QQQ Trust ETF has started to outperform the broader market again, similar to last summer.
- The top stocks within QQQ are not excessively overvalued, as earnings growth has kept up with price appreciation.
- Although QQQ is due for a pullback, technical indicators and seasonality suggest waiting before selling the ETF or buying puts.
- An extended period with the RSI in the overbought zone above 70 and new highs in the month of July would be a more likely place for a pullback to start.
Starting To Look Like Last Summer Again
When I wrote about the Invesco QQQ Trust ETF ( QQQ ) one year ago , it looked expensive to me based on the narrow leadership and high valuations of the top "Magnificent 7" stocks. I rated the ETF a Sell and bought put options expiring about 6 weeks out. That turned out to be a bad trade, as QQQ hit a short-term peak in July right around that expiry date. The Sell rating was not a disaster, however, as long as sellers covered by the end of October....
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QQQ: Almost Time For A Breather