The Invesco QQQ stock price is hovering near its all-time high, helped by a strong US economic rebound, earnings, and the $1 trillion stimulus bill. The ETF is trading at $370, which was 23% higher than the lowest level in March this year and 120% above the lowest level in March last year.
Invesco QQQ bullish trend
Invesco QQQ is an ETF that tracks the performance of the Nasdaq 100 index. The Nasdaq 100 index is made up of the biggest technology stocks in the US like Microsoft, Apple, Tesla, and Amazon. Over the years, this index has outperformed its peers like S&P 500 and Dow Jones, which are often dragged by cyclical stocks. Invesco QQQ has an expense ratio of 0.20%, making it relatively affordable.
The Invesco QQQ stock has surged because of several reasons recently. On Tuesday, the US Senate voted for the $1 trillion infrastructure package that seeks to rebuild America’s roads, rail, and broadband sectors. While the project will benefit companies in the materials and infrastructure sector, tech stocks will also benefit.
Still, the impacts of the infrastructure package will be relatively muted in the longer term. For one, the projects will be implemented in a ten-year period. This is a substantially long period. However, the bill was a sign that bipartisanship can still work in the US.
The Invesco QQQ has also rallied because of the strong economic recovery of the American economy. Recent numbers have been relatively strong. For example, last week, data showed that the manufacturing and services sectors remained stable in July even as the Covid-19 outbreak spread.
And on Friday, data showed that the economy added almost a million new jobs in July. On Monday, data revealed that the economy had more than 10 million vacancies, the highest level on record. These numbers have helped support US stocks, including the constituents of Invesco QQQ.
Earnings
The Invesco QQQ stock price has also benefited from the strong quarterly results. Most companies reported results that were significantly better than estimates.
According to data compiled by FactSet, 89% of all companies in the S&P 500 had published their quarterly results. Of those, 87% reported positive earnings-per-share and revenue surprises. This is the highest figure since the company started tracking earnings in 2008.
The tech earnings season was so strong that companies like Apple, Facebook, Microsoft, Amazon, and Google made a combined net profit of more than $70 billion.
The latest earnings came from Coinbase, the second-biggest crypto exchange in the world. The company made more than $2.3 billion, helped by consumer transactions. Its subscription service grew to more than $100 million. Other companies that published stellar results this week are Doximity, Activision Blizzard, and SmileDirectClub. The key upcoming earnings this week are Wix.com, eBay, Sonos, Vroom, Bumble, and Coupang.
With inflation expectations falling and with companies reporting robust results, there is a possibility that the Invesco QQQ stock price will keep the upward momentum steady.
Invesco QQQ stock analysis
The daily chart shows that the QQQ stock has been in a strong bullish trend in the past few months. Along the way, the fund has formed an ascending channel shown in black. The stock is slightly below the upper side of the channel. It has also moved above the 25-day and 50-day Moving Averages.
Therefore, the bullish trend will likely remain in the near term as bulls target the next psychological level at $400. However, we can’t rule out a situation where the price retests the lower side of the channel at $340.
