E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 11675.50, Weakens Under 11502.50
December E-mini NASDAQ-100 Index futures are trading lower late Tuesday as excitement over signs of a first successful late-stage coronavirus vaccine faded, while investors continued to reduce their exposure to some Big Tech companies that have benefited most from the pandemic.
The tech, communication services and consumer discretionary indexes dropped sharply as investors moved to sectors expected to benefit from a full reopening of the economy, such as energy, industrials and materials.
At 20:40 GMT, December E-mini NASDAQ-100 Index futures are at 11624.25, down 196.25 or -1.66%.
Amazon.com Inc, Facebook Inc and Microsoft Corp, which have boomed during this year’s work-from-home shift and powered Wall Street to new highs, extended Monday’s losses and pulled the tech-heavy NASDAQ down about 1.3%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum shifted to the downside with the formation of a closing price reversal top on Monday and the subsequent confirmation of the bearish chart pattern earlier today.
A trade through 12408.75 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 10942.25.
The minor range is 10942.25 to 12408.75. Its retracement zone at 11675.50 to 11502.50 is currently being tested. Trader reaction to this area should determine the short-term direction of the index.
On Tuesday, the index hit a low of 11503.25, slightly above the Fibonacci level at 11502.50.
The short-term range is 9390.50 to 12444.75. Its retracement zone at 10917.50 to 10557.25 is major support. This zone stopped the selling at 10942.25 on November 2 and at 10660.25 on September 24.
The near-term direction of the December E-mini NASDAQ-100 Index is likely to be determined by trader reaction to the short-term 50% level at 11675.50 and the short-term Fibonacci level at 11502.50. The market is currently trading inside this zone.
Counter-trend traders are trying to increase the selling pressure, while buyers are looking for value with some trying to defend the uptrend.
The daily chart indicates there is plenty of room under 11502.50. This makes this level a trigger point for a potential acceleration to the downside.
Overtaking 11675.50 could trigger a rally into 11956.00. This is the last potential resistance level before the all-time high at 12408.75.