Chart of the Day - Monday, June 17, 2024

🏆 Today’s Chart of the Day was shared by Jason Goepfert (@jasongoepfert).

• The Nasdaq 100 ($QQQ) has become extremely overbought as it continues to print record highs. The Relative Strength Index (RSI) reached its most overbought reading since 2018 today, closing at 81.5.

• Jason points out that RSI on $QQQ will likely hit 82 for the seventh time since inception. He suggests that it hasn’t paid to fade $QQQ after an extremely overbought reading.

• ‘Extremely Overbought’ might sound bearish, but it’s really not. It just means the underlying bid is unusually strong. That’s often a recipe for higher prices, not lower ones.

The takeaway: The Nasdaq 100 ($QQQ) hasn’t been this overbought since 2018, but that’s not necessarily bad. If anything, this is typical bull market behavior.