The direction of the September E-mini NASDAQ-100 Index on Wednesday is likely to be determined by trader reaction to the pivot at 14789.50.
September E-mini NASDAQ-100 Index futures are trading higher at the mid-session on strong earnings from Google-parent Alphabet, as investors turned to the Federal Reserve for more guidance in the wake of rising inflation and the Delta variant on its monetary stimulus.
At 18:00 GMT, all eyes will be on the outcome of the Federal Reserve’s two-day meeting, with investors looking for comments on how the double whammy of rising inflation and a spike in COVID-19 cases would impact the central bank’s plan to potentially start withdrawing its stimulus.
At 16:25 GMT, September E-mini NASDAQ-100 Index futures are at 15016.00, up 68.25 or +0.46%.
In stock related news, Alphabet popped more than 4% after the tech giant posted quarterly results, registering a 69% jump in advertising.
Other tech-related components were mixed. Apple shares dipped 0.4% after CEO Tim Cook warned that silicon “supply constraints” will affect sales of the iPhone as well as the iPad. The company did beat top- and bottom-line estimates and said its iPhone sales surged 50% year over year.
On the other hand, Microsoft saw its shares rise 1% after reporting an earnings beat despite a dip in revenue from its Windows division.
The main trend is up according to the daily swing chart. A trade through 15134.00 will signal a resumption of the uptrend. A move through the last main bottom at 14445.00 will change the main trend to down.
The minor trend is also up. A new minor top was formed earlier in the week at 15134.00.
The minor range is 14445.00 to 15134.00. Its 50% level or pivot at 14789.50 is support. This level stopped the selling on Tuesday.
Additional support is a pair of 50% levels at 14546.25 to 14482.00.
The direction of the September E-mini NASDAQ-100 Index on Wednesday is likely to be determined by trader reaction to the pivot at 14789.50.
Look for a bullish tone as long as buyers can hold the index above 14789.50. If the move creates enough upside momentum then look for a surge into the record high at 15134.00.
The Fed is not expected to say anything major so after the initial reaction to their statement and Powell’s comments, we could get a strong reaction in the after-markets to earnings news from Qualcomm, Facebook and PayPal.
A sustained move under 14789.50 will signal the presence of sellers. If this move creates enough downside momentum then look for a sharp break possibly into a pair of 50% levels at 14546.25 and 14482.00. These are the last potential support levels before the 14445.00 main bottom.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.