Yesterday, we looked at a Keltner Channel chart of Allstate Corp. and noted that it was on a pullback from being overbought.
Today’s Chart of the Day is for ProShares UltraPro QQQ Nasdaq (NYSE: TQQQ).
TQQQ seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of the NASDAQ-100 Index.
Now, the Daily Price Chart below shows that TQQQ has been making a series of 52-Week Highs this month.
Plain and simple? A stock just doesn’t hit a new 52-Week High unless it is in a very powerful up trend.
Stocks in a price uptrend, as we know, do not advance in a straight line.
There are always price retracements along the way.
TQQQ experienced periodic price pullbacks during its strong advance since this time last year.
Traders can get a lower risk entry point after a 3 to 5% price retracement as the stock normally resumes its price up trend after such retracements.
We’ll be sure to continue following TQQQ as it climbs to new heights, and watching for price retracements.
Additionally, we’d like to talk about how a previous Chart of the Day stock has done…
On November 11th, we highlighted Technology Select Sector SPDR (NYSE: XLK), noting that the stock was in a bullish trend and had been making a series of 52-week highs.
If you happened to have purchased XLK shares on that day, you’d already be up 2.29%.
But… if you had purchased the right option contract, you would be up 32.58% in just over two weeks’ time!
That’s the power of options. You may have noticed that Chart of the Day doesn’t recommend specific options plays…
That’s what the PowerTrend Options service does. If you haven’t read about it yet, you can click here to check it out.
Editor, Chart Of The Day