Based on the early price action, the direction of the September E-mini NASDAQ-100 Index on Friday is likely to be determined by trader reaction to the downtrending Gann angle at 7750.75.
September E-mini NASDAQ-100 Index futures are poised to open lower based on pre-market activity. Traders are saying profit-taking ahead of the week-end following a strong run-up this week is contributing to the early weakness. Others are saying concerns over escalating tensions between the United States and Iran are encouraging investors to pare positions.
At 13:06 GMT, September E-mini NASDAQ-100 Index futures are trading 7741.25, down 32.00 or -0.41%.
Despite the early weakness, the index is likely to remain underpinned over the short- to medium- term because of expectations of a rate cut by the Federal Reserve in July and September, and possibly in December.
The main trend is up according to the daily swing chart. A trade through 7821.00 will signal a resumption of the uptrend. The next major upside target is the April 25 top at 7910.75. A move through 7446.25 will change the main trend to down.
The main range is 7910.75 to 6969.00. Its retracement zone at 7551.00 to 7439.75 is major support.
Based on the early price action, the direction of the September E-mini NASDAQ-100 Index on Friday is likely to be determined by trader reaction to the downtrending Gann angle at 7750.75.
A sustained move over 7750.75 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the resistance cluster at 7830.25 to 7830.75. Look for sellers on the first test of this area.
Overcoming 7830.75 will indicate the buying is getting stronger. The next target is an uptrending Gann angle at 7865.00. Overcoming this angle will put the index in a bullish position with 7910.75 the next major target.
A sustained move under 7750.75 will signal the presence of sellers. This is a potential trigger point for an acceleration to the downside with the next target an uptrending Gann angle at 7638.25.
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.