E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Needs to Close Over 13585.50 to Sustain Upside Bias

After a relatively muted opening, June E-mini NASDAQ-100 Index futures reached its highest level before the rally stalled within striking distance of its all-time high. The subsequent retreat turned the index lower, while putting it in a position to form a potentially bearish closing price reversal top. The chart pattern will not change the trend, but it could trigger the start of a short-term correction.

At 19:13 GMT, June E-mini NASDAQ-100 Index futures are trading 13588.75, up 3.25 or +0.02%.

In economic news, U.S. job openings rose in February to a two-year high while hiring picked up. The data came on the heels of Friday’s strong payrolls report and a report on Monday showing activity in the service sector climbed to a record high in March.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out the previous days’ high. A late session move through 13655.00 will signal a resumption of the uptrend.

A trade through 12609.75 will change the main trend to down. This is highly unlikely, but taking out 13585.50 late in the session will put the index in a position to post a closing price reversal top.

The main range is 13888.00 to 12200.00. Its retracement zone at 13243.00 to 13044.00 is the primary downside target and potential support area. This zone is controlling the near-term direction of the index.

The minor range is 12609.75 to 13655.00. Its 50% level at 13132.25 is the primary downside target. This level falls inside the main retracement zone, validating its importance.

Short-Term Outlook

The direction of the June E-mini NASDAQ-100 Index into the close is likely to be determined by trader reaction to 13585.50.

Bullish Scenario

A sustained move over 13585.50 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the intraday high at 13655.00.

Taking out 13655.00 will indicate the buying is getting stronger. This will put the index into a position to eventually challenge the February 26, 2021 main top at 13888.00.

Bearish Scenario

A sustained move under 13585.50 will signal the presence of sellers. This could trigger a late session break with 13243.00 to 13132.25 the next likely near-term target.

Side Notes

A close under 13585.50 will form a closing price reversal top. If confirmed on Wednesday, this could trigger the start of a 2 to 3 day correction. This will not be a change in trend, but actually a move designed to alleviate some of the upside pressure and to perhaps set up another buying opportunity at more favorable prices like the retracement levels at 13243.00, 13132.25 and 13044.00.