E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Reversal Top Signaling Possible Shift in Momentum

September E-mini NASDAQ-100 Index futures finished lower on Thursday, posting a potentially bearish closing price reversal top. Although the chart pattern doesn’t signal a change in trend, it could lead to the start of a 2 to 3 day shift in momentum to the downside.

Traders said the selling pressure was fueled by the realization the Federal Reserve still needs to aggressively boost interest rates to fully tame consumer prices despite fresh evidence of cooling consumer and producer inflation.

On Thursday, September E-mini NASDAQ-100 Index futures settled at 13311.25, down 80.75 or -0.61%. The Invesco QQQ Trust ETF (QQQ) closed at $324.06, down $1.87 or -0.57%.

Wednesday’s drop in the CPI and Thursday’s dip in the PPI raised bets in futures markets that the Fed would hike rates by 50 basis points in September instead of 75 basis points as was expected earlier in the week. However, Fed policymakers still insist they will tighten monetary policy until inflation pressures fully abate.

In stock related news, high growth stocks that had rallied on Wednesday fell, Tesla Inc was down 2.6% and Amazon.com Inc was off by 1.5%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, Thursday’s closing price reversal top suggests momentum may be getting ready to shift to the downside.

A trade through 13575.00 will negate the chart pattern and signal a resumption of the uptrend. A move through 13582.75 will reaffirm the uptrend. The main trend will change to down on a trade through 12072.00.

A trade through 13285.00 will confirm the reversal top. This will shift momentum to the downside and A

The minor trend is also up. A trade through 12963.25 will change the minor trend to down. This will confirm the shift in momentum.

The minor range is 12963.25 to 13575.00. Its pivot at 13269.00 is potential support. The next support is the intermediate Fibonacci level at 13082.50, followed by the intermediate 50% level at 12698.00.

On the upside, the key resistance is a long-term retracement zone at 13812.00 to 14459.50.

Daily Swing Chart Technical Forecast

Trader reaction to the pivot at 13269.00 is likely to determine the direction of the September E-mini NASDAQ-100 Index early Friday.

Bullish Scenario

A sustained move over 13269.25 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a retest of the resistance cluster at 13575.00 to 13582.75.

Bearish Scenario

A sustained move under 13269.25 will signal the presence of sellers. This could trigger a sharp break into 13082.50, followed by the minor bottom at 12963.25.

A trade through the minor bottom at 12963.25 will indicate the selling pressure is getting stronger with 12698.00 the next major target.