Dec 12

QQQQ in Triangle Consolidation Pattern

by Mike Paulenoff, Tue December 12th, 2006

The perspective of the Q's shows the triangle consolidation-type pattern that has developed off of the 11/24 high at 44.86, which remains intact as we speak, but which shows that the lower triangle support line is under pressure (at 43.65/45). A sustained violation of the prior low at 43.48 should trigger downside follow-through that tests a more important pivot low at 43.26 from 12/01. If that level is violated, then we will have ourselves a near-term top in the Q's that projects a target zone of 42.20-41.90. Conversely, inability of the Q's to press lower will keep the triangle pattern intact, and so too the bullish scenario that calls for one more upside thrust into the 45.20/50 area to complete the July-Dec upleg. Much depends on how the market reacts to the FOMC statement in T-minus 1:15.
Chart

Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!