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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Could Retreat into Short-Term Pivot at 6586.75

By:
James Hyerczyk
Published: Apr 23, 2018, 03:57 UTC

Based on last week’s close at 6676.25 and the price action, the direction of the index this week is likely to be determined by trader reaction to the 50% level at 6759.75.

E-mini NASDAQ-100 Index

An index of U.S. technology stocks finished higher last week, but volatility remained at elevated levels. The index surged higher early in the week then buyers scrambled the rest of the week to keep it afloat after sellers erased most of the earlier gains.

June E-mini NASDAQ-100 Index futures settled 6676.25, up 35.50 or +0.53%.

 E-mini NASDAQ-100 Index
Weekly June E-mini NASDAQ-100 Index

Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart, however, the index is still under the influence of the closing price reversal top at 7214.50 from the week-ending March 16. This may be exerting a downward influence on momentum.

A trade through 7214.50 will negate the closing price reversal top and signal a resumption of the uptrend. The trend will change to down on a move through 6306.75. This is followed closely by another main bottom at 6192.50.

The main bottom at 6192.50 is very important because it is the last main bottom formed before the last main top. Taking out this bottom will signal a major shift in investor sentiment.

The main range is the contract range. The bottom is 5353.00. The top is 7214.50. Its retracement zone at 6283.75 to 6064.00 is the main support. The major bottom at 6192.50 is inside this range.

The short-term range is 7214.50 to 6306.75. Its retracement zone at 6759.75 to 6866.50 is the primary upside target and resistance. This zone stopped the rally last week at 6867.00.

If a new range forms between 6306.75 and 6867.00 then its 50% level or pivot at 6586.75 will become the primary downside target this week.

Weekly Swing Chart Technical Forecast

Based on last week’s close at 6676.25 and the price action, the direction of the index this week is likely to be determined by trader reaction to the 50% level at 6759.75.

A sustained move under 6759.75 will signal the presence of sellers. This move could generate enough downside momentum to challenge 6586.75. We could see a technical bounce on the first test of this level, but if it fails then look for an acceleration to the downside with targets coming in at 6306.75 and 6283.75.

Overtaking and sustaining a rally over 6759.75 will indicate the return of buyers. This could create the momentum needed to challenge 6866.50 to 6867.00. Sellers could come in on the first test of this area. Look for an acceleration to the upside if buyers take out 6867.00 with conviction. The weekly chart indicates there is plenty of room to the upside with 7214.50 the next major target.

Watch the price action and read the order flow at two pivots this week: 6586.75 and 6759.75. The two levels are the most important this week.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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