E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – May 22, 2017 Forecast

June E-mini NASDAQ-100 Index futures are trading slightly better shortly before the cash market opening. The market is trading inside Friday’s range which suggests investor indecision and impending volatility.

Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside with the formation of the closing price reversal bottom on Thursday and the subsequent confirmation on Friday.

A trade through 5727.25 will change the main trend to up. A move through 5550.50 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main trend is 5347.50 to 5727.25. Its retracement zone is 5537.25 to 5492.50. This zone is still the primary downside target. Last week’s low at 5550.50 came in slightly above this zone.

The short-term range is 5727.25 to 5550.50. Its retracement zone at 5638.75 to 5659.75 is currently being tested. This zone is controlling the near-term direction of the index.

Sellers are going to try to defend the trend inside this zone in an effort to form a secondary lower top. Buyers are going to try to take out his zone in an effort to make 5550.50 and important main bottom.

Forecast

Based on the current price at 5660.50 and the earlier price action, the direction of the index the rest of the session is likely to be determined by trader reaction to the downtrending angle at 5663.25 and the short-term Fibonacci level at 5659.75.

A sustained move over 5663.25 will indicate the buying is getting stronger. This could generate enough upside momentum to challenge a pair of downtrending angles at 5695.25 and 5711.25. The latter is the last potential resistance angle before the 5727.25 main top.

A sustained move under 5659.75 will signal the presence of sellers. This could attract enough selling pressure to drive the index into the short-term 50% level at 5638.75. Traders should watch this level because if it fails we could see the start of a steep sell-off with the next target angle coming in at 5599.25.

Crossing to the weak side of 5599.25 will put the index in a bearish position with the next major uptrending angle coming in at 5551.50 and the main bottom at 5550.50.

Basically, look for a bullish tone on a sustained move over 5663.25 and a bearish tone on a sustained move under 5659.75.