If this bearish chart pattern starts following through to the downside, it may create a low - risk entry point for short selling $ QQQ (or buying a short ETF such as $ PSQ or
$ QID).
As always, our exact entry, stop, and target prices for
the $ QID trade setup should be noted in the ETF Watchlist section of today's report above.
We are looking to buy
$ QID, rather than sell short $ QQQ, because subscribers with non-marginable cash accounts are unable to initiate short positions, but are not restricted from buying «short ETFs» such as
$ QID.
Therefore, although QQQ is looking pretty bad in the near - term, due to the formation of the right shoulder, we would need to see a breakdown below the «neckline» before selling short QQQ or buying the corresponding inversely correlated ETFs ($ PSQ or
$ QID).
Best designed for short - term trading, rather than «buy and hold» investing, short ETFs such as
$ QID are a great way for traders with non-marginable accounts to still participate on the short side.