Last week we identified a similarity in the price action pattern of QQQ, following a bounce off the body support line, compared with the bounce seen in March of 2020 (“Is QQQ Copying Its Own Bounce Pattern?“)
QQQ’s price action last week invalidated the next leg of the pattern thus invalidated the whole pattern.
While in March 2020 we saw a big green candle in the third week off the bounce, last week is was a big candle, just red and in the opposite direction:
This chart also shows that the 172-week EMA body support line broke. QQQ closed merely 0.08% below the line. That’s within a very reasonable art.
Yes, that’s the 172-week EMA that stepped in to replace the ‘original’ 169-week EMA that broke.
So we now have a double break (although we can still call both of them ‘symbolic’) and a new respected body support line: the 173-week EMA. Like its preceding EMA lines that broke, it too registered in September 2009. Here’s the full view of the Qs with the support lines:
Zooming in:
QQQ is pushing the support lines down. It’s beating them little by little. Right now it has the upper hand. But that doesn’t automatically translate to a price collapse. One should be alerted at this price area and be ready to take actions this way or another.
It will surely be interesting to see where we’re heading from here.
For reference, here’s a view of the Qs with the ‘original’ long term body support line, the 169-week EMA, which was the first one to break after it held intact since September 2009:
