E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – 6374.25 Channel Resistance, 6185.00 Channel Support

December E-mini NASDAQ-100 Index futures closed higher last week. This was a divergence from the cash NASDAQ Composite Index which closed lower for the week, breaking a six-week winning streak.

Some traders are saying the tech market is too bullish with too much investor capital flowing into it. They are trying to build a case for a correction.

Given the prolonged move up in terms of price and time, this week begins with the index in a positon to post a potentially bearish closing price reversal top.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through 6351.50 will signal a resumption of the uptrend. If this occurs and there is no follow-through rally then watch for the formation of the closing price reversal top.

A trade through 5760.00 will change the main trend to down. However, the trigger point for an acceleration to the downside is likely the main bottom at 5577.00.

The short-term range is 5760.00 to 6351.50. Its retracement zone is 6055.75 to 5985.90.

The main range is 5577.00 to 6351.50. Its retracement zone is 5964.25 to 5872.75.

The combination of the two retracement zones makes 5985.90 to 5872.75 the strongest downside target.

Weekly Technical Forecast

Based on last week’s close at 6309.25, the direction of the index this week is likely to be determined by trader reaction to the steep uptrending angle at 6374.25.

Crossing to the strong side of the angle at 6374.25 and sustaining the move will put the index in an extremely bullish position.

The inability to overcome 6374.25 will signal the presence of sellers. If this move creates enough downside momentum then look for a drive into the short-term uptrending angle at 6185.00. Since the trend is up, a test of this angle could draw the attention of buyers.

If 6185.00 fails as support then look for an acceleration to the downside with the next target angle coming in at 5881.00. This is the last potential support angle before the 5760.00 and 5577.00 main bottoms.