Recent softness in technology leaders Apple (NasdaqGS: AAPL) and Netflix (NasdaqGS: NFLX) is a big reason why a Nasdaq-100 exchange traded fund is trailing the overall market as measured by the S&P 500.
One way to hedge further weakness from these “technology generals” is to purchase an ETF that shorts the Nasdaq-100, an investment newsletter said Monday. In other words, this bearish ETF is designed to profit when the tech-heavy index declines on any given day.
The past two sessions have seen “relative weakness” from the pair with Apple “firmly cracking” its 200-day exponential moving average and trading at its lowest level since November of last year, says Tarquin Coe, technical analyst at Investors Intelligence. [Apple Weighs on Nasdaq ETF]
“Ongoing underperformance from prior leaders is not indicative of a healthy market,” he wrote in a note to subscribers Monday.
He recommended a position in ProShares Short QQQ (NYSEArca: PSQ). The ETF seeks a return of 100% of the inverse, or opposite, performance of the Nasdaq-100 on a daily basis.