Conclusion, Investment Implications, Strategy

The Invesco QQQ Trust (QQQ) is in the midst of a February 2023 major uptrend, according to its 200-day moving average, amid expanding investor assets and relative emerging relative outperformance versus the S&P 500 (SPY).  Together, these factors establish favorable conditions for more outright strength and relative outperformance from QQQ and other large cap Technology related assets.

In addition, the recent breakout higher in QQQ targets an additional 10% rise to 540.00 that will remain valid above 468.00, which equates to a 1:2 risk to reward ratio right now.  As the trade begins to work in our favor, we will raise the stop to reduce the risk and increase the risk/reward ratio.

QQQ Trending Higher Amid Expanding Assets & Relative Outperformance Versus Stocks

The upper panel of Chart 1 below shows that the Invesco QQQ Trust (QQQ) is in the midst of a major uptrend, as defined by its 200-day moving average, that originated in February 2023 and was most recently tested and held on Aug 5th and Sep 6th.  The middle panel shows that the total net assets invested in QQQ (AUM) are in the midst of a Sep 13th trend of monthly expansion.  Expanding assets indicate bullish conviction in higher prices.  The lower panel shows that QQQ is also testing its Jly 23rd trend of quarterly relative underperformance versus the S&P 500 (red highlights) and may be in the midst of a new trend of relative outperformance (green highlights).  Relative outperformance by QQQ versus SPY is imperative for QQQ to continue rising on an outright basis.

As long as these three conditions remain true, QQQ is likely to continue moving higher in the weeks ahead.

Chart 1

Current Sector & Industry Group Ideas

Table 1 below is also accessible via the Asbury ETF Trade Ideas rectangle at the top of the Research Center.

Table 1

Click the table to make it larger