QQQ ETF stock raging bull run faces a key risk – Morgan Stanley

Invesco QQQ ETF, which tracks the Nasdaq 100 index, got supercharged after the spectacular earnings from Meta Platforms and Alphabet. The QQQ stock price jumped to a high of $322, the highest level since August 19 of 2022. In all, the ETF has soared by more than 26% from the lowest point in 2022, meaning that the return of the raging bull is upon us.

Morgan Stanley warns about stocks

Invesco QQQ ETF rally gained steam last week after the strong financial results from the likes of Meta Platforms, Microsft, and Alphabet. These results show that big technology companies in the US are doing well after going through challenges in 2023.

Watch here: https://www.youtube.com/embed/zcwuQDBCoJQ?feature=oembed

The next key catalyst for the Invesco QQQ is the upcoming earnings from some of the biggest technology companies like Apple, AMD, and Amazon. These results are expected to show that the industry will continue doing well in the first quarter. 

The other key news will be the latest interest rate decision by the Federal Reserve interest rate decision. As I wrote here, analysts expect that the Fed will hike interest rates by 0.25% this week and then hit a strategic pause. If this happens, risky assets like the technology companies and cryptocurrencies will continue rising.

A key reason why the Nasdaq 100 index could keep rising is the collapse of the First Republic Bank. This collapse could push the Fed to pause rate hikes. 

However, analysts at Morgan Stanley believe that the Fed could shock the market with a hawkish tone, which will push stocks lower. In a statement, Mike Wilson, the bank’s analyst said: 

“That could ultimately be a negative surprise for equities, particularly given the upside in index price we’ve seen into the FOMC and the fact that this meeting is one of the least talked about in recent memory.”

Invesco QQQ ETF stock price forecast

QQQ chart by TradingView

The daily chart shows that the QQQ ETF stock has been in a strong comeback recently. It has moved above the 38.2% Fibonacci Retracement level. It has formed a golden cross pattern, which happens when the 50-day and 200-day exponential moving averages (EMA). 

It also made an inverted head and shoulders pattern, which is a bullish sign. Therefore, there is a likelihood that the QQQ stock price will continue rising as buyers target the key resistance point at $350, the 61.8% Fibonacci retracement point.