Editor's Note: We think the NASDAQ is due to take a breather so we are initiating short positions now.


Powershares QQQQ Trust - QQQQ - close: $49.03 change: +0.29 stop: 50.95

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. (source: company press release or website)

Why We Like It:
The tech heavy NASDAQ 100 has had a remarkable rally over the past two months, gaining +15% since its February 5 intraday lows. In the month of March alone, the index gapped higher at the open on March 1 and has run +8.5% from the February close of $44.76. The index has rallied right into previous resistance and support from 2008 and 2007 respectively (pull up a weekly chart) and is entering a congestion zone. I feel the rally is getting vulnerable and sellers are beginning to show up. Plus volatility is low and options are relatively cheap right now. I view this as an aggressive and quick trade. We will either be right or be right out of the trade.

Suggested Position: Sell QQQQ at current levels, Stop Loss $50.95 (unopened)

Option Traders:
Suggested Position: Buy PUT May $49.00, current ask $1.00

Annotated chart:

Entry on (unopened)
Earnings Date Not Applicable
Average Daily Volume: 49.4 million
Listed on April 10, 2010