The market continues to be risk off this morning on recession fears. Wall Street seems to be bearish coming into this week and traders seemed they didn’t want to chase this market lower. QQQ seems to be into oversold territory, every man and their dog on CNBC is bearish, so we might see a decent bounce once there is enough panic. Could nibbling at long QQQ calls into the close be a good strategy to play the markets ?
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QQQ made new lows this morning but have found some buyers around $261.50. This is the first major level of potential support. Below that, the $260 area is the next major prior support, then it’s $257 and $253 if the QQQ’s want to make a real gut check.
To the upside, $267.10 which was prior support would be the next level of potential resistance. $270 would be an important psychological level above that, and then the next potential resistance is $272.
The biotech sector may provide some relief in the bearish market since innovation that has always supported the biotech industry is alive and well. Some of the biotech stocks to keep an eye on include Novo Nordisk (NYSE:NVO), Johnson & Johnson (NYSE:JNJ), Merck & Co (NYSE:MRK), Novartis (NYSE:NVS) and Jazz Pharmaceuticals (NASDAQ:JAZZ).
