E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Needs to Break Pattern of Lower Tops, Lower Bottoms

June E-mini NASDAQ-100 Index futures are trading higher late in the session on Friday, lifted by Facebook as U.S. Treasury yields took a break from a recent surge.

Facebook Inc rose 4.1%, providing the biggest boost to the S&P 500, after Chief Executive Mark Zuckerberg said Apple Inc’s imminent privacy policy changes on ad sales would leave the social network in a “stronger position.”

At 20:11 GMT, June E-mini NASDAQ-100 Index futures are trading 12830.50, up 50.75 or +0.40%.

Despite today’s rebound, the NASDAQ is still about 6% below its February 12 all-time closing high as technology and high-growth stocks have lost favor in recent months, with their valuations looking less attractive as Treasury yields rise.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 13287.25 will change the main trend to up. Taking out 13316.75 will reaffirm the uptrend. A move through 12200.00 will signal a resumption of the downtrend.

The main range is 13888.00 to 12200.00. Its retracement zone at 13044.00 to 13243.25 stopped the rally on March 16.

The short-term range is 12200.00 to 13287.25. Its retracement zone at 12743.50 to 12615.25 is potential support. This zone stopped the selling at 12681.75 on Friday.

The new minor range is 13287.25 to 12681.75. Its 50% level at 12984.50 is the first upside target.

Short-Term Outlook

Despite the rebound on Friday, the trend is still down and the series of lower tops remains intact. Investors are going to have to break the pattern of lower-top and lower-bottoms in order to convince me that prices are headed higher.

Earlier in the week, a new lower top was formed at 13287.25. On Friday, the market may have signaled that a new secondary higher bottom was forming with the successful test of 12681.75. It’s early, but the selling stopped where it was supposed to, inside the 12743.50 to 12615.25 retracement zone.

The direction of the June E-mini NASDAQ-100 Index over the short-term will be determined by trader reaction to 12743.50 and 12615.25.

Bullish Scenario

A sustained move over 12743.50 will indicate the presence of buyers. But the buying is going to have to be strong enough to overcome 13316.75 in order to confirm that 12681.75 is a solid main bottom.

Bearish Scenario

Taking out 12615.25 will indicate the selling pressure is getting stronger. This could trigger an acceleration to the downside since the next major target doesn’t come in until 12200.00.