QQQ's price has approached the resistance trendline at the top of the trading channel since 2010. It's crucial to monitor this line for a potential breakout. If we observe an upward breakout followed by clear confirmation, it could resemble another "bubble" similar to what we saw in 2021. Otherwise, the price might continue its upward trend while trading sideways until a catalyst emerges.
Valuations for stocks currently appear to be overvalued, resembling late 2020 levels. Depending on the indicator you prefer, we are currently seeing PE ratios and the Buffet indicator ranging from 1.5x to 1.7x standard deviations above the historical average.
Prices have already been inflated due to the AI-driven surge last year, and robust economic growth may further drive prices upward as momentum (MOMO) and fear of missing out (FOMO) take hold. Since November, any significant sell-off has been met with strong buying, as we observed this week.
Predicting price movement becomes challenging when we reach the edges of historical price trends. Good luck out there.
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Resistance held for today.
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Wednesday 2/7
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Friday and a close above the trading channel. Tech stocks are powering ahead with good quarterly results and are only pumping up the overvalued market even more. Are we starting the next bubble? Looking for a follow through and possible test next week.
You have the right channel but drew your upper line incorrectly. That channel actually extends to 340-345 so QQQ has more upside before the minor pullback. And it all makes sense as the normal NASDAQ composite is around 300 points away from its ATH (Only index to not make a new high yet). 300 points brings qqq to around 340. Then obviously will eclipse its ATH so that makes 5-600 points which makes 345-350 that range where we hit and then will have a minor pullback and consolidate.