E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Despite Early Rally, Buying Not Very Impressive

Although the market is in an uptrend, this week’s chart pattern suggests traders are having a hard time following through to the upside. Even as we inched higher this week, it was all done on lower-than-normal volume.
James Hyerczyk
E-mini NASDAQ-100 Index

December E-mini NASDAQ-100 Index futures are trading slightly higher shortly before the close on Thursday after giving up most of their earlier gains.

The headlines will tell you that the market was up because of optimism over Brexit after a deal was announced and a strong performance by shares of Netflix. However, that’s not the whole story.

It’s true that prices spiked higher after a potential deal between the UK and EU was announced well before the cash market opening. It’s true that a strong earnings report supported the technology index, however, the price action looked like a computerized reaction to the news. There was not a lot of buying throughout the session, allowing the index to drift lower to nearly unchanged for the session.

This suggests buyers are being a little tentative at current price levels. Valuation could be an issue. Perhaps traders believe stocks are overpriced. Uncertainty over whether the U.K. parliament will approve the Brexit deal. The lack of clarity over the U.S.-China partial trade deal. Worries about the strength of the U.S. economy and whether the Fed will have to cut rates again at the end of the month.

These are all real concerns and they’re important enough to keep the major buyers on the sidelines. If the market is having a hard time breaking out to the upside, then perhaps investors are looking for value. If this is true then the market could be setting up for a steep break into a support or value zone.

On Thursday, December E-mini NASDAQ-100 Index futures settled at 7952.75, up 4.25 or +0.06%.

Daily December E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed early in the session when buyers took out the main top at 7973.75.

The rally stalled at 7994.75, slightly below the 8002.50 main top. After hitting its high for the session, the index retreated and nearly turned lower for the period late in the day. This suggests the presence of sellers.

The short-term range is 7583.25 to 7994.75. Its retracement zone at 7789.00 to 7740.50 is the nearest downside target.

Daily Swing Chart Technical Forecast

Although the market is in an uptrend, this week’s chart pattern suggests traders are having a hard time following through to the upside. Even as we inched higher this week, it was all done on lower-than-normal volume.

At quick glance, the daily chart pattern indicates any rallies are likely to be labored with potential resistance at 8002.50 and 8071.75.

However, the daily chart also indicates the index is vulnerable to the downside with the first target the short-term 50% level at 7789.00.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.