PowerShares QQQ (NasdaqGM: QQQ) fell 5% Thursday as exchange traded funds tracking the major stock indexes followed European markets lower on worries over the debt crisis and weakness in the global economy.
The highly traded technology ETF is indexed to the Nasdaq-100.
Technical analyst Tarquin Coe at Investors Intelligence said the action in PowerShares QQQ this week has been disappointing.
On Wednesday, “bulls effectively ran out of enthusiasm following three failed attempts to punch through resistance,” he wrote in a newsletter Thursday. “This morning’s futures suggest a breakdown from this level and in doing so it brings the top formation decisively back into play. That pattern has a target down to $48 [a share].”
The Nasdaq-100 ETF closed Wednesday at $53.58 and is slightly negative for 2011.
The recent drop in the PowerShares QQQ of 16% broke through the “neckline” of a head and shoulders pattern and a longer term trend-line, said David Chojnacki, an analyst at Street One Financial. “The recent bounce temporarily moved back through the neckline, but once again it begins to pull back.”
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