E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Set-Up Makes 16460.00 Trigger Point for Acceleration

March E-mini NASDAQ-100 Index futures closed near its high of the week last Thursday as positive news about the spread of the Omicron variant drove investors into higher risk technology stocks. Better-than-expected U.S. economic data also boosted prices. The price action also suggests that investors have downplayed the hawkish Federal Reserve announcement from the prior week.

Despite the solid gains, some investors remained cautious and questioned the validity of the rally due to the well-below average holiday volume.

On Thursday, March E-mini NASDAQ-100 Index futures settled at 16299.00, up 129.25 or +0.63%. The Invesco QQQ Trust Series 1 ETF (QQQ) finished at $396.99, up $3.04 or +0.77%.

Daily Swing Chart Technical Analysis

The tech-weighted index settled on the strong side of a short-term retracement zone at 16280.50 to 16130.00, making it support. This area is followed by a minor retracement zone at 16088.25 to 15974.50.

Combining the two retracement zone forms an important support cluster at 16130.00 to 16088.25, which could determine the short-term direction of the index.

The major support is 15567.25 to 15284.00. This zone stopped the selling at 15492.00 on December 20.

Short-Term Outlook

The early direction of the March E-mini NASDAQ-100 Index on Monday is likely to be determined by trader reaction to 16280.50.

Look for the bullish tone to continue on a sustained move over 16280.50. If this move creates enough upside momentum then look for the market to surge into the pair of main tops at 16457.00 to 16460.00.

Taking out 16460.00 will change the main trend to up and could trigger an acceleration to the upside with the all-time high at 16768.00 the next major upside target.

A failure to hold 16280.50 will be the first sign of weakness. This could trigger a break into the support cluster at 16130.00 – 16088.25. Look for a technical bounce on the first test of this area.

If 16088.25 fails as support then look for the selling to possibly extend into 15974.50. This is a potential trigger point for an acceleration to the upside.

Volume could be a problem on Monday because of the long Christmas holiday weekend and the upcoming New Year’s holiday weekend.

Although there are set ups for breakouts and breakdowns, be careful buying strength and selling weakness due to below average volume.