E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Needs to Close Over 12596.00 to Sustain Momentum

December E-mini NASDAQ-100 Index futures are trading higher late Tuesday, bouncing back from earlier losses. Although the index reached another record high, there has been very little follow-through to the upside. In the cash market, the NASDAQ Composite also traded at an all-time high.

The rollout of Pfizer’s vaccine in the U.K. may be spooking technology traders since a successful application would likely help the economic recovery and make cyclical stocks more attractive than the tech-based stay-at-home stocks.

At 18:39 GMT, December E-mini NASDAQ-100 Index futures are trading 12627.50, up 31.50 or +0.25%.

Besides the Pfizer-BioNTech vaccine rollout, traders are also being influenced by the negotiations for additional fiscal stimulus while the U.S. coronavirus caseload continues to rise.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out yesterday’s high. A trade through 10942.25 will change the main trend to down.

The minor trend is also up. A trade through 12086.00 will change the minor trend to down. This will also shift momentum to the downside.

Due to the prolonged move up in terms of price and time, the market may be overdue for a potentially bearish closing price reversal top. This makes yesterday’s close at 12596.00 the number to watch into the close.

There are no key retracement levels to watch since the market continues to make higher-highs.

Short-Term Outlook

The direction of the December E-mini NASDAQ-100 Index into the close is likely to be determined by trader reaction to 12596.00.

Bullish Scenario

A sustained move over 12596.00 will indicate the presence of buyers. There is no upside target or resistance. This market is being driven by momentum and a top will be put in when the momentum stops. One of the best signals for identifying this is the formation of a closing price reversal top.

Bearish Scenario

A sustained move under 12596.00 will signal the presence of sellers. Taking out yesterday’s low at 12474.75 will indicate the selling pressure is getting stronger.

A close under 12596.00 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction, or a 50% correction of its minor ranges, or both.

For a look at all of today’s economic events, check out our economic calendar.