inverse H&S on $JEPQ / $QQQThis is going to be very similar to my idea on JEPI. JEPQ is almost identical but instead of being benchmarked against the SPX index like JEPI, JEPQ is benchmarked to the Nasdaq 100, or NDX. It has a very interesting construction where it mimics the return of the Nasdaq or more popularly known as QQQ while providing a monthly dividend by the way of selling OTM calls against the NDX. This can be seen when you just look at the top ten holdings of JEPQ, listed below(as of September 30, 22).
APPLE INC COMMON STOCK- 10.2%
MICROSOFT CORP COMMON - 8.8%
ALPHABET INC COMMON- 6.3%
AMAZON.COM INC COMMON- 5.7%
NDX_4- 4.8%
NDX_3- 4.4%
TESLA INC COMMON STOCK- 3.7%
NDX_2- 3.3%
NDX_10- 2.6%
META PLATFORMS INC- 2.4%
As you can see in the top 10 holdings, they have 4 different sets of calls they are selling to generate premiums. Hence the name, premium income. The reason I bring this ETF up is that it is a great way to produce a monthly dividend and provide some income while also having a low expense ratio at only 0.35%. This can either be paid out or reinvested to increase your position since. I like this method for DCAing into a position.
You can find the top ten holdings of the popular ETF QQQ here.
www.invesco.com
I noticed that there was an inverse H&S on the QQQ , and naturally, it was on JEPQ as well. QQQ using 20-day moving average/.236 fib as support at 273.14/273.18 respectively. The neckline it needs to break with some heavy volume and momentum is at about the .382 fib or 284.88.
Today is the ex-dividend date, so today would be a perfect day to buy the first tranche. If you are more of a trader and would like to play this setup to see if it breaks the neckline, I would suggest using the vehicle QQQ instead since it is much much more liquid and actually has options (JEPQ does not offer options yet).
JEPQ doesn't have much of a track record, but just like with JEPI, do not worry for the construction is solid and it should be a mainstay in your portfolio.
Not financial advice, opinions only. Do your own due diligence!
