E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – October 26, 2016 Forecast

December E-mini NASDAQ-100 Index futures are expected to open lower based on the pre-market trade. The selling is being fueled by yesterday’s bearish earnings report from Apple that triggered a near gap-lower opening.

Technical Analysis

The main trend is up according to the daily swing chart. It turned up on a trade through 4901.50 earlier in the week. Momentum shifted to the downside with the formation of a closing price reversal top on Tuesday and the subsequent follow-through break earlier today. The potentially bearish chart pattern was confirmed today when sellers took out 4873.50.

The short-term range is 4754.50 to 4919.50. Its retracement zone at 4837.00 to 4817.50 is the primary downside target today. An uptrending support angle passes through this zone at 4826.50 today, making it a valid downside target also.

Since the main trend is up according to the swing chart, traders should look for a buying opportunity today on a test of the retracement zone at 4837.00 to 4817.50. This could lead to an intraday retracement of the break from yesterday’s high at 4919.50.

Forecast

Based on the current price at 4863.75 and the downside momentum, I’m looking for early selling pressure to drive the market into the retracement zone at 4837.00 to 4817.50. I’ll be watching the order flow and the price action on a test of this zone to see if buyers are coming in to support the market.

If they do come and the buying is strong enough to overcome 4837.00 then look for an intraday retracement of the break from 4919.50.

If the selling is too strong and 4817.50 fails as support then look for the break to continue with a possible acceleration into the uptrending angle at 4790.50.

If there is no break and buyers come in shortly after the opening then look for a possible rally back to the uptrending angle at 4898.50. Overcoming this angle will signal that the buying is getting stronger with potential targets at 4913.50, 4919.50 and 4925.50.