E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Look for Early Strength Following Strong Close

December E-mini NASDAQ-100 Index futures rose to a record high on Tuesday – ahead of a major Federal Reserve decision – as strong corporate earnings fueled investor optimism for a strong year-end rally.

Better-than-expected corporate earnings results boosted the U.S. stock averages to finish October at record highs, with the NASDAQ Composite posting its best month since November 2020.

At 20:27 GMT, December E-mini NASDAQ-100 Index futures are trading 15958.75, up 64.50 or +0.41%.

The record high comes as investors continue to bet on a year-end rally despite supply chain issues, COVID risk and a Federal Reserve that’s about to indicate it’s going to pull back on some stimulus. The Fed’s two-day meeting began earlier today.

The Fed at the conclusion of its two-day meeting on Wednesday is expected to announce it will begin unwinding its $120 billion in monthly bond purchases implemented during the pandemic. The major concern for investors and a potential source of volatility will be the Fed’s decision on the timing of its first post-pandemic rate hike and the frequency of subsequent rate hikes.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at 15980.25 will signal a resumption of the uptrend. The main trend will change to down on a move through 15273.75.

The minor range is 15273.75 to 15980.25. Its 50% level at 15627.00 is the nearest support.

The short-term range is 14585.50 to 15980.25. If the main trend changes to down then its pivot at 15282.75 will become the next support target.

The main range is 14367.75 to 15980.25. Its retracement zone at 15174.00 to 14983.75 is the nearest value area.

Daily Swing Chart Technical Forecast

The direction of the December E-mini NASDAQ-100 Index into the close on Tuesday is likely to be determined by trader reaction to 15894.25.

Bullish Scenario

A sustained move over 15894.25 will indicate the presence of buyers. This could trigger a surge into 15980.25. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 15894.25 will signal the presence of sellers. If this move creates enough downside momentum then look for a possible steep drop into 15627.00.

Side Notes

A close under 15894.25 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction with 15627.00 the first target.