E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Confirmation of Weekly Reversal Top Could Drive Index Sharply Lower

E-mini NASDAQ-100 Index futures posted a potentially bearish closing price reversal top on the weekly chart after hitting a new contract high earlier in the week. The chart pattern suggests the selling may be greater than the buying at current price levels. If confirmed by a trade through 7292.50, we could be looking at the start of a 2 to 3 week correction equal to at least 50% of the last rally from 6339.00 to 7437.75.

Last week, September E-mini NASDAQ-100 Index futures settled at 7360.00, down 33.00 or -0.45%.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, the closing price reversal top may be a sign that momentum is getting ready to shift to the downside.

A trade through 7292.50 will confirm the chart pattern and shift momentum to the downside. A move through 7437.75 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is also up. A trade through 6956.00 will change the minor trend to down and reaffirm the shift in momentum.

The minor range is 6956.00 to 7437.75. Its retracement zone at 7196.75 to 7140.00 is the first downside target. Since the trend is up, buyers could step in to stop the selling, at least temporarily.

The main range is 6339.00 to 7437.75. If the minor trend changes to down then look for a test of its retracement zone at 6888.25 to 6758.75. Inside this zone is an uptrending Gann angle at 6851.00, making it a valid downside target.

Weekly Technical Forecast

Based on last week’s close at 7360.00, the direction of the September E-mini NASDAQ-100 Index this week is likely to be determined by trader reaction to an uptrending Gann angle at 7363.00.

A sustained move over 7363.00 will indicate the presence of buyers. Overcoming the uptrending Gann angle at 7370.25 will indicate the buying is getting stronger. If this generates enough upside momentum then look for a test of 7437.75. Taking out this level will signal a resumption of the uptrend.

A sustained move under 7363.00 will signal the presence of sellers. This could trigger an acceleration into the minor retracement zone at 7196.75 to 7140.00. Look for a technical bounce on the first test of this zone.

If 7140.00 fails then the selling pressure could get stronger with potential targets 6956.00, followed closely by 6888.25 and 6851.00.