Fun Fact #53
MU announced a buyback along with an Intel deal day. As a result, MU surged despite the entire market being down! Read more here.
Note that the above price changes are for the last 2 days. I am still bullish.
I think QQQ has made a bull flag pattern. This pattern is formed when the price goes up vertically and then consolidates. I’ve drawn the flag on the chart above. The target if QQQ breaks out above 170 is the length of the flag pole, which is about 8-10 dollars depending on how you draw the flag. That means QQQ could reach 178-180 within a few weeks after breaking out over 170. The only concern is that the move upwards wasn’t on significant volume.
DIA, like QQQ, also looks quite strong. Since DIA broke out above the resistance level near 247.5, I think there’s a good chance DIA will bounce upwards from the 245-247.5 support zone. I’ve highlighted that support zone in the chart above. Also, please note that the volume on down days is significantly lower than on up days, signaling that buyers are still in control of the price action.
The SPY is doing the same thing as the QQQ and DIA. It is currently taking a break after a strong upwards move. I think the odds favor a breakout upwards, but if SPY closes below 270, I think we move significantly lower.
Speaking of bull flags, here’s the chart of BABA. Notice how BABA had a vertical move up on huge volume, and is now consolidating. The volume has decreased significantly as well which is a great sign. A break above 200 signals a lot more upside. The length of the flag pole is 30, so if BABA breaks out above 200, the measured move up would be to a price of 230. I analyzed the weekly chart of BABA in a previous blog post, and the chart also hints that a break above the 200-205 resistance level signals a lot more upside.
Thanks for reading, and I will see you Thursday!