E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – February 20, 2017 Forecast

March E-mini NASDAQ-100 Index futures are trading higher early in the session on Monday. The market posted another higher high to continue the uptrend. The volume was light on the move and there wasn’t much of a follow-through rally. The move also put the index in a position to post a potentially bearish closing price reversal top. Now that we’ve had the higher-high, all we need is a lower close to form the chart pattern.

Technical Analysis

The main trend is up according to the daily swing chart. However, our only worry at this time is the closing price reversal top. We had one form last Thursday, but there was very little follow-through to the downside when the chart pattern was confirmed on Friday. In fact, Friday’s outside move was strong enough to take out the reversal top at 5317.00, negating the chart pattern.

If we get another closing price reversal today, or the second in three days, then this would send a signal that the selling is greater than the buying at current price levels.

A trade though 5289.75 will change the minor trend to down.

The current main range is 5083.25 to 5337.50. If sellers start to gain control of the market then look for a possible correction into the retracement zone at 5210.25 to 5180.25.

Forecast

Based on the current price at 5335.50 and the earlier price action, the direction of the E-mini NASDAQ-100 Index today is likely to be determined by trader reaction to the steep uptrending angle at 5307.25.

A sustained move over 5307.25 will indicate the presence of buyers, but we need to see a sustained move over Friday’s close at 5325.75 to keep the index moving higher.

Now that we’ve had the higher-high, an intraday move back under 5325.75 will signal the presence of sellers. This could generate enough downside momentum to challenge the steep uptrending angle at 5307.25.

The inability to hold the angle at 5307.25 will indicate the selling is getting stronger. The first target is the minor bottom at 5286.75. If the selling is strong enough to take out this price with conviction then look out to the downside.

The daily chart indicates there is plenty of room to the downside with the next major target the 50% level at 5210.25.

To keep it simple, the overall trend will remain bullish if buyers can hold the index above the angle at 5307.25.

The rally will continue to strengthen if buyers can sustain a rally over Friday’s close at 5325.75.

The first sign of weakness will be a sustained intraday move under 5325.75. The next will be a move under 5307.25 and the third will be a sustained move under 5286.75.

On the downside, we know where the index can go. On the upside, we don’t know where the resistance is.