As Stock Market Rally Stalls, Here Are Crucial Levels For SPY, QQQ Investors Need To Watch This Week

U.S. markets ended lower last week, dragged by disappointing economic data that indicated the Federal Reserve may continue to remain on its rate hike path for some time to come. The S&P Global Purchasing Manufacturer’s index returned to expansion for the first time in eight months in February.

The core personal consumption expenditures price index, which is the central bank’s preferred measure of inflation, rose 0.6% in January and 4.7% from the prior year, above economist estimates of 4.3%.

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As a result, the SPDR S&P 500 ETF Trust SPY closed 2.37% lower for the week while the Invesco QQQ Trust Series 1 QQQ lost 3.04%.

As February comes to an end, here's a look at crucial trading ranges for the ETFs:

1. SPDR S&P 500 ETF Trust: Options expiring on March 3 show the maximum open interest build-up at the 400-Call strike with 11,847 contracts at the time of writing. This indicates the level may act as stiff resistance for the week. On the downside, the 390-Put strike is witnessing the maximum open interest build-up with 67,585 contracts, indicating the level could act as strong support for the week.

2. Invesco QQQ Trust Series 1: Options expiring on Friday indicate a significant open interest build-up at the 295-Call strike indicating the level would act as a stiff resistance. On the downside, open interest levels indicate the 290 level as a major support.

It is noteworthy that open interest levels can only provide a fair idea about the potential resistance and support levels. Any major news flow or macro event could lead to significant price movements in the assets, thereby shifting the open interest levels.

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