Chart of the Day - Friday, November 6th, 2020

Today’s Chart of the Day was shared on Twitter by Alfonso Depablos (@AlfCharts). It's a weekly candlestick chart of the Nasdaq 100 ETF, $QQQ over the past 3.5 years. $QQQ climbed 9.32% this week, marking the 2nd best week for the ETF in the past decade. As Alfonso points out, the ETF closed at an all-time weekly high for the first time in more than two months. When price is in unchartered territory like this, Fibonacci extensions are one of the only useful tools we have to identify potential resistance levels. For whatever mysterious reason, price is often attracted to these levels like a magnet. Now that we're decisively above the 261.8% extension of the 2000-2002 decline, the next logical price target is the 423.6% extension around $446, which is about 50% higher from current levels. In a comment to The Chart Report, Alfonso said, "This is definitely not bearish action for stocks, and the 261.8% extension now offers you a well-defined risk level."