Here’s What I’ll Be Doing When The Q’s Hit $28

  • April 21, 2003
  • Derrick Hobbs


Two charts continue to lurk around on my 19” LCDs.
The first is a weekly chart of the Nasdaq 100
Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating). The second, is a daily chart of the
Semiconductor HOLDRs
(
SMH |
Quote |
Chart |
News |
PowerRating).

Basically, QQQ has slammed up
against Fibonacci price resistance for six weeks now. That zone is from 26.50 to
27.96. If the 28.00 level is reached, my Fibonacci parameters suggest we could
be in for a fast and furious rally up to the 31 to 32 range. That would be
consistent with the AB=CD pattern that is developing on the weekly chart
(outlined in red below). The flipside to this chart is that we cannot clear
resistance and QQQ rolls over from here.

 

The question I ask myself is
what the catalyst will be (technically speaking) to drive QQQ higher. I think
the Semi HOLDRs will provide fuel I’m looking for. Follow me on the chart below:

  1. There is a large Fibonacci
    price resistance zone from 28 to 29.60

  2. There are two Bearish
    patterns completing into this price resistance zone

  3. A gap fills at 27.90

Now, based on these parameters
I am very interested in short trades once price reaches the 28 range. My stop
would be just above 29.60. However, the fuel on the long side would occur if
these patterns and price resistance are violated. If SMH pushes above 29.60,
this would be the catalyst for QQQ to climb up to the weekly target of 31 to 35
that we mentioned earlier.

 

Have a great night!


Derrik Hobbs

 

 

 

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