Trader who tried to bet against tech changes his tune

The Nasdaq 100 just entered its longest bull market ever, rallying for nine years without a 20 percent decline, and that has one trader changing positions on his former bet against big tech.

On Oct. 19, TradingAnalysis.com founder Todd Gordon made a bet that the Nasdaq 100-tracking ETF (QQQ) would fall after hitting a year-to-date high. Since the trade, however, QQQ has actually rallied almost 5 percent.

This as tech giants like Apple, Microsoft, Amazon and Facebook have surged to all-time highs in the last month, with Amazon seeing the biggest one-month jump at 16 percent. Together, all four names make up more than 32 percent of the holdings in QQQ, helping to drive the ETF up to new highs.

Now, Gordon believes QQQ has a bit more to go before hitting the top part of a parallel channel he sees forming in the charts.

"It looks like we are going to be bumping up against resistance in the $158 to $160 region," he said Tuesday on CNBC's "Trading Nation." "That's not to say the market has to stop here, it's that at this point we will designate the market as overbought."

In other words, Gordon believes that QQQ still has up to 3 percent to go in the short term.

QQQ hit another intraday record high Tuesday, and is up 31 percent year to date.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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