To The Moon

Kia ora Happiness.,

I've done an analysis of TQQQ based on the latest data as of August 3, 2024, and here are my insights for you. Please note that I am not a financial adviser and that these are my views only 😊

Current Market Context:

August is historically a very tough month for stocks, especially tech stocks. It’s a Bear market and will remain so until October. The S&P 500 has experienced a significant decline of about 5% over the past few weeks [oai_citation:1,Why Stocks Have Tanked in August and What Wall Street Expects Next - Markets Insider](https://markets.businessinsider.com/news/stocks/stock-market-outlook-grantham-burry-goldman-rosenberg-wall-street-investors-2023-8). Rising bond yields and economic concerns, including China’s economic slowdown and the recent US debt downgrade, have added to market volatility [oai_citation:2,Why Stocks Have Tanked in August and What Wall Street Expects Next - Markets Insider](https://markets.businessinsider.com/news/stocks/stock-market-outlook-grantham-burry-goldman-rosenberg-wall-street-investors-2023-8) [oai_citation:3,Audience Type – AP Institutional | Invesco](https://www.invesco.com/apac/en/institutional/insights/market-outlook/the-outlook-for-us-tech-stocks-following-the-sectors-outperformance-year-to-date.html).

Tech Sector Performance:

Tech stocks had a strong start to the year, driven by advancements in AI and other innovations. However, they are sensitive to macroeconomic factors like interest rates and inflation [oai_citation:4,Technology sector outlook 2024 | Tech stocks | Fidelity](https://www.fidelity.com/learning-center/trading-investing/outlook-information-technology). Given the Fed's aggressive rate hikes, tech stocks will face headwinds in the short term. See my recent post on SMCI also.

TQQQ Indicators and Analysis:

1. RSI (Relative Strength Index): Neutral, indicating no immediate overbought or oversold conditions.

2. MACD (Moving Average Convergence Divergence): No bullish confirmation yet, with the line remaining parallel and below zero.

3. Bollinger Bands: Trading near the middle band, with the 50-day MA acting as resistance.

4. Stochastic Oscillator: Neutral, indicating balanced market conditions.

5. Chaikin Money Flow: Neutral, showing no significant money flow direction.

6. Candlestick Patterns: Recent patterns suggest indecision, with no clear bullish or bearish signals.

Fibonacci Levels:

- Support Levels: Around $57.00, which corresponds to a significant Fibonacci retracement level.

- Resistance Levels: Near $60.72, another critical Fibonacci level that could act as resistance IF the price attempts to rebound.

Outlook:

Given the current bearish trend in tech and the heightened volatility of leveraged ETFs like TQQQ, holding TQQQ for the long term (2-3 years) could be risky. The mixed signals from various indicators and the challenging macroeconomic environment suggest extreme caution.

Michael James McDonald, a prominent stock market forecaster, mentioned on Seeking Alpha, "The negative net outflow of money in TQQQ indicates an increased risk of lower prices. Longer-term investors should consider taking profits and moving to lower-risk index funds, while short-term investors can stay but should be prepared to limit losses if the market reverses" [oai_citation:1,ProShares UltraPro QQQ ETF (TQQQ) Latest Stock Analysis](https://seekingalpha.com/symbol/TQQQ/analysis) [oai_citation:2,TQQQ – ProShares UltraPro QQQ – ETF Stock Quote | Morningstar](https://www.morningstar.com/etfs/XNAS/TQQQ/quote).

According to MarketBeat, hedge funds have been increasing their positions in TQQQ, signaling confidence in its performance and potential. The report highlights, "ProShares UltraPro QQQ has recently hit a new 12-month high at $66.51, indicating strong upward momentum. However, investors should be cautious due to the high volatility associated with its triple leverage exposure to the NASDAQ-100 Index" [oai_citation:3,ProShares UltraPro QQQ (TQQQ) Chart and Price History 2024](https://www.marketbeat.com/stocks/NASDAQ/TQQQ/chart/).

Suggestions only ~

1. Hold with Caution If you believe in the long-term growth of the tech sector and do not need the funds urgently, holding TQQQ could be an option. However, be prepared for significant volatility and potential further losses.

2. Diversify: To mitigate risk, consider diversifying your portfolio with less volatile investments. This can provide a hedge against the potential downside in TQQQ.

3. Monitor Key Levels: Keep an eye on the support around $57.00 and resistance near $60.72. A breach of these levels could indicate future price direction.

4. Use Stop-Loss Orders: Setting stop-loss orders can help manage risk and protect against substantial losses.

Hey Tiger Traders, would you hold TQQQ given its high leverage and current indicators, or would you cut losses and look for safer opportunities?

@TigerGPT , what strategies can be employed to mitigate risks when holding highly leveraged ETFs like TQQQ for the long term?

Wishing you all the very best to navigate your decision!

Happy trading ahead. Cheers, BC 🍀

@Tiger_comments @CaptainTiger @TigerPM @TigerStars @All_In_TQQQ @koolgal @Shyon