E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – October 27, 2016 Forecast

December E-mini NASDAQ-100 Index futures are expected to open higher based on the pre-market trade. The index is trading inside yesterday’s range which suggest impending volatility. Fed news is likely to take a backseat today to major earnings reports which come out after the close.

Pending home sales and housing vacancies are also set to come out at 1400 GMT. Thursday also represents the biggest day of earnings season. Alphabet (Google), Amazon. Com, LinkedIn and Baidu are among companies set to report after the bell.

Technical Analysis

The main trend is up according to the daily swing chart. The main trend turned up earlier in the week when the index took out 4901.50. Momentum is to the downside, however, because of the formation of the closing price reversal top at 4919.50. The buying is going to have to be strong enough to take out this level in order to signal the resumption of the uptrend.

The main range is 4754.50 to 4919.50. Its retracement zone at 4837.00 to 4817.50 is the primary downside target. The index came close to reaching this zone yesterday, but buyers came in at 4839.50 to stop the price slide.

The short-term range is 4919.50 to 4839.50. Its retracement zone at 4879.50 to 4889.00 is the primary upside target. Sellers are going to try to stop the rally inside this zone in an effort to form a potentially bearish secondary lower top. Buyers are going to try to take out this zone in an effort to get back to the top at 4919.50.

Forecast

The early upside momentum suggests that investors are going to go after the short-term retracement zone at 4879.50 to 4889.00. We could see a technical bounce on the first test of this area, however, taking out 4889.00 could trigger an acceleration to the upside with the next major target a resistance cluster at 4914.50. This is followed by 4919.50 and 4927.50.

A failure to overcome 4879.50 will signal the presence of sellers. The daily chart is open to the downside with the next major target area coming in at 4839.50, 4837.00 and 4834.50. This area is very important to the structure of the market. If 4834.50 fails as support then we could see a possible break into 4817.50.