E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Bullish Over 6671.00, Bearish Under 6667.75

E-mini NASDAQ-100 Index futures soared to a record high last week as investors continued to react to relatively low global interest rates, low volatility and the synchronization of global economic growth.

March E-mini NASDAQ-100 Index futures settled the week at 6667.75, up 259.00 or +4.04%.

The index is being driven by momentum so it doesn’t make sense to stand in the way of the rally. Besides, you probably don’t have enough money to stop the move. The best advice is to let the momentum stop then read the chart pattern. There is no resistance so it’s going to be a chart pattern like a closing price reversal top that tells us when the correction is about to begin.

We also think investors should start preparing for increased volatility. Last year, volatility was nearly nonexistent, as indicated by the VIX index dropping to its lowest level ever.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through 6671.00 will signal a resumption of the uptrend.

Taking out 6671.00 then breaking back under last week’s close at 6667.75 will indicate the selling is greater than the buying at current price levels. This could lead to the formation of a potentially bearish closing price reversal chart on the weekly chart. This chart pattern often leads to a 2 to 3 week correction.

Weekly Technical Forecast

A sustained move over 6671.00 will signal the presence of buyers.

A sustained move under 6667.75 will indicate the presence of sellers. The daily chart is wide open to the downside with the next target a price cluster at 6465.50, 6455.00, 6416.00 and 6414.75. Since the main trend is up according to the swing chart, we could see a technical bounce on the first test of this area.

Look for an acceleration to the downside if 6414.75 fails as support. This could trigger a move into 6450.00 then 6228.50.