E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Short-Term 50% Level at 7157.25 Very Important This Week

September E-mini NASDAQ-100 Index futures closed higher last week. Helping to put in a new minor bottom and closing above the mid-point of a minor range in the process. Although a slight upside bias may be developing, we were not too excited about the move because it was accomplished during a low-volume period. We reserve the right to hold judgment about the strength of this index until we get to see the price action early this week when the “big boys” return from the extended U.S. holiday week-end.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, momentum has been drifting lower since the formation of the closing price reversal top during the week-ending June 22 and the subsequent confirmation of the chart pattern the week after.

A trade through 7358.50 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 6956.00 will indicate the selling pressure is getting stronger.

The minor trend is also up. A trade through 6956.00 will change the minor trend to down.

The minor range is 7358.50 to 6956.00. Its 50% level at 7157.25 is controlling the short-term direction of the index. Closing above this level is helping to give it the slight upside bias.

The main range is 6339.00 to 7358.50. If the selling pressure resumes then its retracement zone at 6848.75 to 6728.50 will become the primary downside target. Since the main trend is up, buyers may come in on a test of this zone.

Weekly Technical Forecast

Based on last week’s close at 7233.50, the direction of the September E-mini NASDAQ-100 Index futures contract this week is likely to be determined by trader reaction to the steep uptrending Gann angle at 7235.00.

A sustained move over 7235.00 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to extend into a series of short-term downtrending Gann angles at 7262.50, 7310.50 and 7334.50. The latter is the last major resistance angle before the 7358.50 main top.

A sustained move under 7235.00 will signal the presence of sellers. This could drive the index into a steep downtrending Gann angle at 7166.50.

Crossing to the weak side of the downtrending Gann angle at 7166.50 will put the index in a bearish position. Breaking through the short-term pivot at 7157.25 will signal that the selling is getting stronger.

The selling will get serious under 7157.25 so watch for an acceleration to the downside. The first target is 6956.00, followed by 6848.75.