Playing PowerShares QQQ

Published on Thursday, 29 September 2011 18:28 Written by Christian Paolinetti

New York, September 29th (TradersHuddle.com) - Shares of PowerShares QQQ Trust (NASDAQ:QQQ) closed the trading session at $53.88 near its 50 day and 200 day moving averages currently set at $54.68 and $56.27 respectively. PowerShares QQQ's price action is below these important levels, which makes the stock difficult to buy, as there will certainly be resistance as it approaches these important moving averages.

PowerShares QQQ Trust (NASDAQ:QQQ) is a unit investment trust that issues securities called PowerShares QQQ Index Tracking Stock. The Trust holds all of the component securities of the NASDAQ-100 Index. The Investment objective of the Trust is to provide investment results that generally correspond to the price and yield performance of the NASDAQ-100 Index. Invesco PowerShares Capital Management is the Sponsor of the Trust and The Bank of New York Mellon is the Trustee.

Latest price action range, defined by a peaks and troughs algorithm placed calculated support at $52.75 and calculated resistance at $56.20. These levels should be watched by traders, as they provide insight into the latest price dynamics in PowerShares QQQ shares.

Traders should evaluate their options if they want to establish a position on PowerShares QQQ given the heavy resistance expected near the 50 and 200 day moving averages. A trade might be evident as the stock manages to break these moving averages, however until the break materializes buying the stock is nothing different than flipping a coin. Other levels that traders will closely evaluate are the ones defined by the peak and troughs algorithm that provides great price level reference points.