The tech-heavy Nasdaq 100 ETF (QQQ) finds itself at a critical technical juncture just as tech giants prepare to release earnings!
Will strong tech earnings fuel a sustained breakout above the rising wedge, or could any disappointments trigger a pullback to test buyer commitment?
Check out these inflection points I’m watching on the 4-hour time frame:
Nasdaq 100 ETF (QQQ) 4-hour Chart by TradingView
The QQQ has been constructing a well-defined rising wedge pattern since August, with price action now testing a critical technical zone around the previous swing high around $505. This comes at a pivotal time as market heavyweights Alphabet, Microsoft, Meta, Amazon, and Apple are all set to report earnings this week.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. With major tech earnings on deck, make sure you’ve researched expectations for cloud services growth, AI developments, ad revenue trends, and hardware sales before taking any positions in QQQ this week!
Looking at the technicals, several bullish arguments are emerging.
The 100 SMA (blue line) remains firmly above the 200 SMA (pink line), with both moving averages showing positive slopes. Price has also been respecting these dynamic support levels during pullbacks, suggesting buyers remain active on dips.
So if tech earnings comes out net positive this week, be on the lookout for sustained upside breaks of key resistance levels ($504 previous swing high / rising wedge pattern) before considering a plan to play a potential continuation in the uptrend from there. With a daily ATR of around $6, strong momentum may take QQQ up to $510 – $520.
However, if earnings disappoint, bears might target the Pivot area or S1 pivot support ($493.61) which aligns with both the rising wedge support and the monthly pivot point. This technical confluence presents a key battleground – while buyers may step in to defend this support zone, a decisive break lower could embolden sellers to push for deeper corrections.
Whatever directional bias you take, remember that both scenarios require close attention to how the market reacts to earnings from GOOGL (Tuesday), MSFT/META (Wednesday), and AAPL/AMZN (Thursday). Also, we’ve got a pretty heavy week of economic updates, so be sure to check out our Week Ahead post to get in tune with the broad market catalysts as they may be an influence on QQQ as well.
Also remember that earnings season can bring heightened volatility and unexpected reactions, so be sure to practice proper risk management and size your positions appropriately for what promises to be an action-packed week in tech!