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Nasdaq ETF Drops Below 50-Day Average on Apple Decline


The Nasdaq-100 PowerShares QQQ (QQQ) fell below its 50-day simple moving average Tuesday for the first time since July with a four-day pullback in top holding Apple (AAPL) weighing on the tech-heavy ETF.

Apple shares slipped below $630 a share for the first time since August after piercing $700 last month.

The stock is the largest individual holding in QQQ at 19.1% of the portfolio, according to manager Invesco PowerShares.

The Nasdaq-100 stumbled below the 50-day average Tuesday while SPDR S&P 500 (SPY) and SPDR Dow Jones Industrial Average (DIA) remain comfortably above the technical indicator.

“The lone sector below its 50-day is Technology, which is also the largest sector in the S&P 500 at roughly 20%. If it weren’t for Tech’s recent underperformance, the overall market would have already made a new high,” Bespoke Investment Group notes.

Apple shares were trading at $628 on Tuesday morning, down about 11% from the all-time high set in September. The company recently launched the latest version of its hot-selling iPhone. [Apple Drags Nasdaq-100 ETF on iPhone 5 Sales]

QQQ, the Nasdaq-100 ETF, is up 23.3% year to date, compared with a 17.8% gain for the S&P 500, according to Morningstar.

From a technical perspective, technical analysts are talking about a potential head and shoulders pattern forming in QQQ. This is a bearish topping formation.

PowerShares QQQ

Full disclosure: Tom Lydon’s clients own QQQ, SPY and AAPL.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.