E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – February 5, 2019 Forecast

March E-mini NASDAQ-100 Index futures are trading higher at the mid-session on Tuesday, but backing off from its intra-day high. The lack of fresh economic and earnings data until after the close today is encouraging some profit-taking and position-squaring.

An early session rally was fueled by upbeat earnings and a positive tone ahead of tonight’s State of the Union speech by U.S. President Trump. The price action suggests that investors expect Trump to strike an optimistic chord by putting a positive spin on U.S.-China trade negotiations. However, thin trading conditions due to the Lunar New Year holiday in Asia could create volatile whip-saw conditions.

At 1800 GMT, March E-mini NASDAQ-100 Index futures are trading 6988.50, up 51.00 or +0.73%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The next upside target is the December 3 main top at 7169.00. The main trend will change to down on a trade through 6592.25.

The major retracement zone is 6792.75 to 7022.25. The market is currently trading inside this zone. This area is controlling the longer-term direction of the index.

The intermediate retracement zone at 6653.75 to 6494.75 is a potential downside target and support zone.

Daily Swing Chart Technical Forecast

Based on today’s price action, the direction of the March E-mini NASDAQ-100 Index the rest of the session is likely to be determined by trader reaction to the major Fibonacci level at 7022.25.

Bullish Scenario

A sustained move over 7022.25 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to possibly extend into the next main top at 7169.00. If there is bullish news about China, prices could surge into this level. If the earnings reports continue to beat estimates then look for the steady grind to continue.

Bearish Scenario

A sustained move under 7022.25 will signal the presence of sellers. Turning lower for the session on a move through 6937.50 will indicate the selling is getting stronger. This will also put the index in a position to post a potentially bearish closing price reversal top. This could trigger the start of a 2 to 3 day correction.

The first downside target is the major 50% level at 6792.75. This is followed by the short-term Fibonacci level at 6653.75.

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