E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 13917.25, Weakens Under 13741.75The direction of the June E-mini NASDAQ-100 Index on Thursday will be determined by trader reaction to 13917.25 and 13741.75.
June E-mini NASDAQ-100 Index futures are trading nearly flat near the cash market close on Wednesday after giving up all of its earlier gains. The technology index is expected to finish inside yesterday’s trading range, suggesting investor indecision and impending volatility.
The price action so far this week has been muted as stocks traded inside a tight range in the absence of any clear market catalysts. Meanwhile, most of the major institutions and mutual funds have been on the sidelines this week as money managers await the release of a U.S. consumer inflation (CPI) report at 12:30 GMT on Thursday.
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At 19:59 GMT, June E-mini NASDAQ-100 Index futures are trading 13819.50, up 8.00 or +0.06%.
Economists are expecting the CPI to rise 4.7% from a year earlier, according to Dow Jones. In April, the CPI increased 4.2% on an annual basis, the fastest rise since 2008.
Investors will be watching the inflation data closely, with concerns that it could prompt the Federal Reserve to taper asset purchases sooner rather than later, despite the central bank having argued that higher price pressures were temporary.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 13917.25 will signal a resumption of the uptrend. A move through 13462.25 will change the main trend to down.
The minor range is 13462.25 to 13917.25. Its 50% level at 13689.75 is the nearest potential support level.
The short-term range is 12915.00 to 13917.25. If the main trend changes to down then look for a test of its retracement zone at 13416.00 to 13297.75.
Given today’s inside move, the direction of the June E-mini NASDAQ-100 Index on Thursday will be determined by trader reaction to 13917.25 and 13741.75.
A sustained move over 13917.25 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the first main top at 14064.00.
This move would likely take place if the CPI number comes in weaker than expected since it would dampen the chances of tapering by the Federal Reserve.
A sustained move under 13741.75 will signal the presence of sellers. It would likely take place if the CPI number came out higher than expected, increasing the odds the Fed would start seriously considering reducing its asset purchases.
The first downside target is the pivot at 13689.75. We could see a technical bounce on the first test of this level. However, if it fails, we could see an acceleration to the downside with 13462.25 the next likely target, followed by the short-term retracement zone at 13416.00 to 13297.75.