Nasdaq 100 index, QQQ stock are on the cusp of a bullish breakout

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The Nasdaq 100 index and Invesco QQQ stock have moved to a bull market as technology companies continue their strong comeback. QQQ, which is the biggest Nasdaq 100 ETF, jumped to a high of $313.71, which is ~20% above the lowest point since December 23rd and ~22% above its November lows.

Technology rally continues

The Nasdaq 100 index has done well this year despite the volatility in the financial market. It has outperformed the S&P 500 and the Dow Jones index even as the banking crisis has escalated. Most importantly, it has jumped even as the Federal Reserve has maintained its extremely hawkish tone this year.

This rally has been driven by big-cap technology companies. Nvidia stock price has jumped by ~88% this year, making it the best-performing QQQ constituent. It has done well as investors bet that the chip industry will make a comeback. Most importantly, it has been influenced by the rise of artificial intelligence. As the biggest GPU maker, the company will benefit as computing power increases.

Meta Platforms stock has risen by ~70% this year as the company goes through a major restructuring. It has announced thousands of layoffs and slowed its investments in the metaverse. As I wrote in this article, the company ended its Non-Fungible Token (NFT) investments.

Tesla stock price is up by over 57% even as the EV industry faces its biggest challenges. It has risen as many upcoming EV companies falter and China continues its reopening. However, there are concerns about China’s demand since the company has announced several price cuts.

AMD share price has jumped by 48% in 2023 as demand for computing power increases. One of the biggest technology news of the year was Micron’s results, which did well. These results showed that demand for computer chips has bounced back.

Other top-performing QQQ constituents in 2023 are firms like Warner Bros Discovery, Airbnb, Palo Alto Network, and Fortinet. In a note, an analyst at Etrade told Bloomberg:

“The bear market may be closer to its end than its beginning, but investors should be realistic about the possibility of more volatility on the near-term horizon.”

QQQ stock price forecast

The Nasdaq 100 index and QQQ ETF move in the same direction. On the 4h chart, we see that the QQQ stock price has moved above the 61.8% Fibonacci Retracement level. It is also attempting to move above the key resistance point at $312.92, the highest point on February 2. The ETF is being supported by the 25-day and 50-day moving averages.

Therefore, the cup and handle pattern points to a strong bullish breakout in the coming days. If this happens, the next key level to watch will be $320 followed by August’s high of $336.

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