PowerShares QQQQ Trust - QQQQ - close 43.96 change +1.36 stop 46.90

Company Description:
PowerShares QQQ Trust, Series 1 (the Trust) is a unit investment trust that issues securities called PowerShares QQQ Index Tracking Stock. The Trust holds all of the component securities of the Nasdaq-100 Index (the Index). The Investment objective of the Trust is to provide investment results that generally correspond to the price and yield performance of the Nasdaq-100 Index. Invesco PowerShares Capital Management, LLC is the Sponsor of the Trust and The Bank of New York Mellon is the Trustee.

Target(s): 42.55, 41.80, 41.05
Key Support/Resistance Areas: 46.77, 45.20, 44.46, 43.50, 42.50, 41.00
Time Frame: 1 to 2 weeks

Why We Like It:
QQQQ had a monster truck rally today but I believe this will be short lived. The ETF is nearing an important resistance level at $44.46 and has all of its SMA's and plenty of congestion overhead to act as resistance. The rectangle on the chart represents a gap that I suppose could get filled so conservative traders may consider waiting to enter at $45.00. I'm just not confidant the gap will get filled. Today was a relief rally and we may get a little more but I think the selling will resume again and QQQQ should easily retest its lows and possibly break them. Let's use a trigger of $44.30 to initiate short positions. Our stop is $46.90 and I do not see QQQQ trading up to this level prior to breaking down again.

Suggested Position: Short QQQQ stock if it trades to $44.30

Options Traders: August $45.00 PUTS, current ask $2.08, estimated ask at entry $1.90

Annotated chart:

Entry on July xx
Earnings N/A (unconfirmed)
Average Daily Volume: 100 million
Listed on July 7, 2010