There’s an argument to be made that the $QQQ is forming a bearish pennant. As support and resistance converge, the price will have to either break down or break out. Technical traders look at the bearish pennants (when the flagpole that kicks off the downward trend points down), as a sign that the stock might break down below support. A similar shape is forming in the $SMH Semiconductor ETF, where there is clear resistance at the 50-day moving average and clear support at the 200-day moving average. The 50 and the 200 are slowly converging. If they converge, something interesting will happen. (Charts courtesy of StockCharts.com)
