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An Incredible Share to Hold in a Bull Market

April 4, 2023

If we are in a new bull market on the Nasdaq 100 and I think we are there is one incredible share that you have to have in your portfolio.

I am very encouraged by the way that the QQQ3 share price is behaving so I have broken off from the alert I was writing to send a quick alert on QQQ3. It is just in process of giving a buy signal on the 3M charts (where each candlestick represents three months) that I am finding especially helpful at the moment.

If we are at the beginning of a new and powerful bull market as I strongly suspect we are then it is hard to imagine a better share to be holding than QQQ3, which combines three times leverage with daily rebalancing to deliver incredible outperformance of the underlying indices which in this case means the Nasdaq 100, which is no mean performer itself.

So, serious wow!

An incredible share to hold in a bull market

The conventional wisdom is that QQQ3 is not suitable for long term investors but look at the chart, This is an incredible share to hold when the stock market is climbing,

A propos of which I came across a brilliant simile the other day likening the stock market (the Nasdaq 100, at any rate) to a helium balloon. Left to its own devices it will climb. You have to actively pull it down to make it descend.

That is what causes bear markets, enough bad news to drag the balloon lower, bad news like inflation, rising interest rates, war in Ukraine, fear of recession, bank failures but eventually these become old news and lose their power to drag the balloon down at which point it resumes its natural direction, which is to climb.

Where are we now? I think the balloon is heading higher again. No doubt there will be periodic tugs to drag it lower but the direction of travel, like many Coppock indicators, currently, including the one for QQQ3, seems to me to be higher.

You never know with the stock market, almost by definition, or we would all be billionaires but I do have the feeling that if you don’t buy now what are you waiting for, Jesus with a flaming sword carving time to buy on the old oak tree.

Underpinning my enthusiasm for QQQ3 is yet again AI, which I still think is poised to send investors wild with excitement. If AI starts pumping up values for a growing number of Nasdaq quoted shares where is this going to be reflected first, in the value of QQQ3 which is rebalanced daily so perfectly designed to capture newly emerging stock market trends.

My hunch is that we have a set of circumstances developing in the stock market which could send QQQ3 ballistic.

Time to buy Polar Capital Technology and Allianz Technology

Just as back-up I have taken a look at two UK-quoted investment trusts which have high exposure to technology, which have excellent management, have been strong performers over the years and have good looking charts just now.

One is Polar Capital Technology.

Just look at that geographical breakdown – 0.3pc in the UK. What an indictment of the barely breathing corpse that the UK economy has become under successive dead hand of the state governments.

The 10 largest holdings are interesting because look at all those semiconductor stocks. I think it is a really good list and bodes well for the performance of PCT shares.

Allianz Technology Trust has 81.55pc of portfolio in the USA

It’s all very similar to the performance of Polar Capital Technology Trust with a Coppock buy signal and all the signs that we are going to see a golden cross by the moving averages on this chart where each candlestick represents three months. The largest holdings include the usual suspects. ON Semiconductor looks an interesting one. I am not so sure about Pure Storage but overall it is a good list.

Strategy

The one in which I am really interested here is QQ3 and by now I am sure subscribers will know why. I love that turbocharged performance. However both investment trusts have been excellent performers over the years and if you want to ramp them up you could buy them in a CFD or a spread betting account with five times leverage. Needless to say this is what I would do if I bought them but then we know that I am a risk-obsessed gambling madman; at least that is what my wife thinks and I would not dream of contradicting a lady.

Share recommendations

Wisdomtree Nasdaq 100 3x Daily Leveraged. QQQ3. Buy @ $84.50

Polar Capital Technology Trust. PCT. Buy @ 1980p

Allianz Technology Trust. ATT. Buy @ 229.5p

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