The high-tech Nasdaq 100 ETF (QQQ) finds itself at a critical technical juncture just as the tech giants prepare to release earnings!
Will strong tech gains fuel a sustained break above the rising wedge, or could any disappointments trigger a pullback to test buyer commitment?
Check out the turning points I’m watching on the 4-hour time frame:
Nasdaq 100 ETF (QQQ) 4-hour Chart by TradingView
QQQ has been building a well-defined rising wedge pattern since August, with price action now testing a critical technical zone around the previous swing high around $505. This comes at a pivotal time with market heavyweights Alphabet, Microsoft, Meta, Amazon and Apple set to report earnings this week.
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. With big tech earnings ahead, make sure you’ve researched forecasts for cloud growth, AI developments, ad revenue trends, and hardware sales before taking a position on QQQ this week!
Looking at the technical issues, several bullish arguments emerge.
The 100 SMA (blue line) remains strongly above the 200 SMA (pink line), with both moving averages showing positive slopes. The price also respects these dynamic support levels during pullbacks, indicating that buyers remain active on dips.
So, if tech earnings come out positive this week, be on the lookout for sustained upside breakouts of key resistance levels ($504 pre-swing/rising wedge pattern) before considering a game plan for a potential continuation of the upside from there. With a daily average ATR of around $6, strong momentum could take QQQ to $510-$520.
However, if earnings disappoint, bears may target the pivot zone or pivot support S1 ($493.61) which corresponds to the rising wedge support and monthly pivot point. This technical confluence represents a key battleground – while buyers may step in to defend this support area, a decisive break lower could encourage sellers to push for deeper corrections.
Whatever directional bias you take, remember that both scenarios require close attention to how the market reacts to earnings from GOOGL (Tuesday), MSFT/META (Wednesday), and AAPL/AMZN (Thursday). Also, we have a very heavy week of economic updates, so be sure to check our post for next week to tune in to broad market catalysts as they may have an impact on the QQQ as well.
Also remember that earnings season can bring extreme volatility and unpredictable reactions, so be sure to practice proper risk management and size your positions appropriately for what promises to be an action-packed week in technology!