E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Lower Close Could Trigger Steep Break Next Week

March E-mini NASDAQ-100 Index futures closed lower on Thursday as investors continued to react rising U.S. Treasury yields and concerns over earnings in several major tech stocks.

The index is trading higher early Friday, but it is still in a position to post a potentially bearish weekly closing price reversal top. This could trigger the start of a 2 to 3 week correction and 50% correction of the last rally.

Daily Swing Chart Analysis

The main trend is up according to the daily swing chart. However, momentum shifted to the downside with the formation of the closing price reversal top on January 29 at 7047.25.

A trade through 7047.25 will negate the closing price reversal top and signal a resumption of the uptrend.

A move through 6884.75 will indicate the selling pressure is getting stronger.

The minor range is 7047.25 to 6884.75. Its 50% level or pivot is 6966.00. The price action this week indicates that this level is controlling the short-term direction of the market. Closing below this level is giving the index a downside bias.

The main range is 6383.25 to 7047.25. If the selling pressure begins to accelerate to the downside then we could see a test of its retracement zone at 6715.25 to 6637.00.

Daily Swing Chart Forecast

Based on the early price action, the direction of the March E-mini NASDAQ-100 Index is going to be determined by trader reaction to the short-term pivot at 6966.00.

A sustained move under 6966.00 will signal the presence of sellers. This could generate the downside momentum needed to challenge yesterday’s low at 6884.75.

Taking out this level with increasing selling volume could trigger an acceleration to the downside with 6715.25 the initial downside target.

A sustained move over 6966.00 will indicate the presence of buyers. If buying volume increases on the move then buyers may try to challenge the high for the week.