E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Short-Term Strength Over 7420.75, Short-Term Weakness Under 7383.25

E-mini NASDAQ futures are trading sharply lower early Thursday in reaction to weaker-than-expected earnings results from Facebook.

After the bell, disappointing quarterly earnings results from Facebook led to a major decline in the after-hour trade. Given the early move, the company is on track to lose more than $125 billion in market value. This represents about a fifth of its value.

At 0604 GMT, September E-mini NASDAQ-100 Index futures are trading 7404.75, down 65.00 or -0.87%.

Other big technology stocks are also getting hit by a wave of selling pressure. Apple lost about 1 percent. Amazon, which reports after the bell Thursday, lost 2.3 percent. Netflix, which disappointed investors last week, was down about 3 percent in after-hours. Finally, Google parent Alphabet fell 2.4 percent.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. On Wednesday, the index hit an all-time higher. Since the bad news struck after the close, there was no closing price reversal top, which is usually the best sign of a major top. However, taking out yesterday’s low did make 7530.00 a new minor top. The price action also indicates that investors were caught by surprise by the news.

A trade through 7530.00 will signal a resumption of the uptrend. A move through 7311.50 will change the main trend to down and a trade through 7292.50 will reaffirm the downtrend.

The short-term range is 7311.50 to 7530.00. Its 50% level is at 7420.75. The intermediate range is 7292.50 to 7530.00. Its Fibonacci level comes in at 7383.25. Since the main trend is up, combining the two levels makes 7420.75 to 7383.25 a support zone.

The main range is 6956.00 to 7530.00. If the main trend changes to down then its retracement zone at 7243.00 to 7175.25 will become the primary downside target.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the September E-mini NASDAQ-100 Index the rest of the session will likely be determined by trader reaction to the Fibonacci level at 7383.25.

A sustained move over 7383.25 will indicate the presence of buyers. Overtaking the 50% level at 7420.75 will indicate the buying is getting stronger.

The next read for day-traders will be the 50% level of the break from 7530.00 to today’s intraday low, currently 7388.50. Overcoming this level which is currently 7459.25, will indicate that upside momentum is building, setting up a possible test of 7530.00.

A sustained move under 7383.25 will signal the presence of sellers. The daily chart opens up under this level with the next targets 7311.50 and 7292.50. If the latter fails then look for a test of 7243.00 to 7175.25.

Even though the swing chart trend will be down when 7243.00 to 7175.25 is tested, counter-trend buyers could still show up because this is a value area.