Leverage a Bet on the Nasdaq 100


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ProShares Ultra QQQ ( QLD ) -- This exchange-traded fund ( ETF ) seeks daily investment results, before fees and expenses, that correspond to twice the daily performance of the Nasdaq 100 Index ( NDX ). 

  QLD Chart

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We've covered QLD many times here in the past year, always noting that it is in a powerful bull market. But on Jan. 21, QLD rolled down, penetrating both its 20- and 50-day moving averages , before executing a key reversal day on Feb. 5. 

Since then, it has been under consistent accumulation, and on Tuesday broke through a double-top to a new 18-month high. 

Volume may not be as high as we would like in order to positively confirm the breakout, but momentum is high, and that alone could catapult QLD to a target of $70. 

This "ultra fund" carries greater risk than an ordinary ETF, so investors should use stop-loss orders.

Also, the SEC has determined that ultra funds are not good long-term investments and that they are most appropriate for short-term trades. The margin requirement for most leveraged ETFs is 100%, but check with your broker before entering an order.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Investing Ideas
Referenced Stocks: ETF , QLD , QQQ

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Sam Collins

Sam Collins

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