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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Closing Price Reversal Top Suggests Momentum Shift

March E-mini NASDAQ-100 Index futures are in a position to post a daily closing price reversal top. If confirmed on Monday, this could trigger the start of a 2 to 3 day correction.
James Hyerczyk

Profit-taking ahead of the weekend helped drive March E-mini NASDAQ-100 Index futures lower on Friday. Not only are investors starting to have problems with valuations, but they’re also worried about the economic impact on technology stocks from the outbreak of the coronavirus epidemic. The concerns were enough to overcome the upbeat tone of the latest U.S. Non-Farm Payrolls report.

At 21:43 GMT, March E-mini NASDAQ-100 Index futures are trading 9404.00, down 51.50 or -0.54%.

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 a potentially bearish closing price reversal top.

The chart pattern won’t change the main trend to down, but if confirmed, it could lead to a 2 to 3 day correction, or a 50% to 61.8% retracement of the last rally.

The short-term range is 8966.00 to 9471.00. Its retracement zone at 9218.50 to 9159.00 is the next potential target zone.


Short-Term Outlook

Based on the steep rally this week and the price action on the Friday, the key level to watch into the close is yesterday’s close at 9455.50.

Closing under 9455.50 will form a closing price reversal top. If confirmed on Monday then look for the selling to possibly extend into the uptrending Gann angle at 9286.00, followed by another uptrending Gann angle at 9213.50 and the short-term retracement zone at 9218.50 to 9159.00.

Overtaking 9471.00 will negate the closing price reversal top. This could trigger a further rally into an uptrending Gann angle at 9501.50. Overcoming this angle will put the index in a bullish position.

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