Late Stage of Convergence Pattern (QQQ)

October 22, 2023, 10:35 am EDT

Late Stage of Convergence Pattern (QQQ)

The Nasdaq 100 ETF (QQQ) made one of the strongest rally in 2023 by reaching about 44% gains in 7.5%. However, QQQ was moving sideways for the past 3 months (July-October). 

When we look at the pattern, it forms a convergence pattern of lower-high at top and flat at the bottom as shown. 

In technical analysis it illustrated investors are less optimistic about its future but do not want to give up its potential during this period. 

But, when the lower boundary was tested 3-4 times it gave a hint about its internal weakness for potential breakdown. This warning signal is fatal for market participants to prepare when the major event happens. 

Breaking down the key support line in this case around 353 for QQQ would terminate the existing consolidation pattern. Furthermore, a major downturn could begin.

Share This Post
Have your say!

Leave a Reply