E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Bearish Divergence Signals Weakness

The index also confirmed Tuesday’s closing price reversal top. This doesn’t change the main trend to down, but it could trigger the start of a 2 to 3 day pullback into the nearest 50% to 61.8% zone.
James Hyerczyk
E-mini NASDAQ-100 Index

March E-mini NASDAQ-100 Index futures are trading slightly higher on Wednesday, while diverging from the S&P 500 Index and Dow Jones Industrial Average futures contracts that posted record highs. This could be a sign of developing weakness. It also indicates trepidation by buyers at current price levels.

The index also confirmed Tuesday’s closing price reversal top. This doesn’t change the main trend to down, but it could trigger the start of a 2 to 3 day pullback into the nearest 50% to 61.8% zone.

At 19:44 GMT, March E-mini NASDAQ-100 Index futures are trading 9071.25, up 8.75 or +0.10%.

Daily March E-mini NASDAQ-100 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum may be getting ready to shift to the downside with the formation of the closing price reversal top on January 14 at 9114.75 and the subsequent confirmation of the chart pattern earlier today.

A trade through 9114.75 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 8678.00.

The short-term range is 8678.00 to 9114.75. Its retracement zone at 8896.25 to 8844.75 is the first downside target zone.

Daily Technical Forecast

Traders appear to be treating yesterday’s close at 9062.50 like a pivot.

Bullish Scenario

Turning higher for the session will put the index in a position to challenge the closing price reversal top at 9114.75. This is followed by an uptrending Gann angle at 9117.25. Crossing to the strong side of this angle will put the index in an extremely strong position.

Bearish Scenario

A sustained move under 9062.50 will indicate the presence of sellers. The first uptrending target angle comes in at 8998.00. Look for buyers on the first test of this angle.

Taking out 8998.00 will indicate the selling is getting stronger. This could trigger a break into the short-term 50% level at 8896.25. Look for buyers again on the initial test.

If 8896.25 fails then the selling is likely to extend into a potential support cluster at 8844.75 to 8838.00.

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