E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – December 26, 2018 Forecast

Based on the early price action, the direction of the March E-mini NASDAQ-100 Index on Wednesday is likely to be determined by trader reaction to the major 50% level at 5866.50. The price action has also put the index in a position to form a potentially bullish closing price reversal bottom. This chart pattern will not change the main trend to up, but it will indicate the buying is greater than the selling at current price levels. If confirmed, the reversal pattern can trigger the start of a 2 to 3 day counter-trend rally.
James Hyerczyk
E-mini NASDAQ-100 Index
E-mini NASDAQ-100 Index

March E-mini NASDAQ-100 Index futures are currently in a position to open the regular session higher. The rally is being driven by a reversal to the upside after earlier session weakness failed to attract enough sellers to continue the move. The price action has also put the index in a position to form a potentially bullish closing price reversal bottom. This chart pattern will not change the main trend to up, but it will indicate the buying is greater than the selling at current price levels. If confirmed, the reversal pattern can trigger the start of a 2 to 3 day counter-trend rally.

At 1405 GMT, March E-mini NASDAQ-100 Index futures are trading 5966.00, up 74.00 or +1.25%.

Daily March E-mini NASDAQ-100 Index

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, the session begins with the March E-mini NASDAQ-100 Index inside the window of time for a closing price reversal bottom. The index is also trading on the strong side of a downtrending Gann angle and a major 50% level.

Earlier in the session, the index traded inside a major long-term retracement zone at 5866.50 to 5450.75. Trader reaction to this zone could determine the near-term direction of this index. This zone is potential support.

Daily Technical Forecast

Based on the early price action, the direction of the March E-mini NASDAQ-100 Index on Wednesday is likely to be determined by trader reaction to the major 50% level at 5866.50.

Bullish Scenario

A sustained move over 5866.50 will indicate the presence of buyers. This could lead to a test of Monday’s close at 5892.00. Overtaking this level will put the index in a position to form a daily closing price reversal bottom. If this generates enough upside momentum, we could see a drive into the nearest downtrending Gann angle at 6321.00.

If the closing price reversal bottom is formed and confirmed then we could see a rally into a retracement zone at 6358.75 to 6485.75 over the next 2 to 3 sessions.

Bearish Scenario

A sustained move under 5866.50 will signal the presence of sellers. If this generates enough downside momentum then look for a retest of today’s intraday low at 5820.50. Taking out this level will signal a resumption of the downtrend.

The next target angle drops in at 5745.00. Crossing to the weak side of this angle will indicate the selling is getting stronger. This could lead to a test of the July 5, 2017 main bottom at 5688.50. Look for an acceleration to the downside if this level fails as support.

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