TQQQ ETF: What next for the ProShares UltraPro QQQ stock?

The Proshares UltraPro QQQ ETF (TQQQ) stock price has done well this year as big-cap technology stocks have jumped. As I wrote here, the Nasdaq 100 index has moved to a bull market. The TQQQ ETF stock jumped to a high of $28.80, the highest point since September last year. It has soared by more than 90% from the lowest point this year.

Inflation as a catalyst 

The TQQQ ETF is a popular fund with over $13 billion in assets. It tracks the Nasdaq 100 index, which is made up of the biggest American technology companies like Apple, Microsoft, Nvidia, and Meta Platforms. 

TQQQ differs from QQQ in two ways. First, it is a leveraged fund that seeks to achieve results that correspond to three times the daily performance of the Nasdaq 100 index. This means that the fund’s investors do better than QQQs when things are going on well and worse in down markets.

Second, TQQQ ETF is more expensive to maintain since it has an expense ratio of 0.86% compared to QQQ’s 0.20%. The 66 basis points difference can add up in the long term.

The ProShares UltraPro QQQ ETF has done well this year, helped by the strong performance of big-tech companies. For example, Microsoft, Alphabet, and Nvidia have all outperformed because of their investments in artificial intelligence. 

The other top performers in the TQQQ ETF this year are companies like Discovery Inc, Palo Alto Networks, and Advance Micro Devices (AMD). On the other hand, the most notable laggards in the index are Sirius XM, Enphase, Moderna, Ross Stores, and PayPal among others.

The fund will likely continue rising in the coming months after the encouraging American inflation data. The data revealed that the country’s inflation dropped to 4.9% in April, giving the Fed a room to stop hiking interest rates.

TQQQ ETF stock price forecast

QQQ chart by TradingView

The daily chart shows that the TQQQ share price has been in a slow bullish trend in the past few days. It is now approaching the 23.6% Fibonacci Retracement point. The fund has also moved above the 50-day exponential moving average while the Relative Strength Index (RSI) has moved above the neutral point of 50.

Therefore, while there are risks to the market, including the debt ceiling issue, I suspect that the fund will continue rising as buyers target the 23.6% retracement level at $33, which is about 14% above the current level.