E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 7879.50, Weakens Under 7727.50
June E-mini NASDAQ-100 Index futures finished higher on Friday after reversing earlier weakness. The index was likely dragged higher by the NASDAQ Composite which closed at record highs on Friday as better-than-expected economic data offset a mixed batch of corporate earnings.
First-quarter gross domestic product was 3.2%, the Commerce Department said on Friday, topping the consensus economist estimate of 2.5%. On the data front, Amazon shares closed 2.5% higher after results topped expectations on Thursday.
On Friday, June E-mini NASDAQ-100 Index futures settled at 7840.25, up 41.75 or +0.53%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 7879.50 will signal a resumption of the uptrend. The main trend will change to down on a move through 7276.00. This is highly unlikely, but there is room for a normal 50% to 61.8% correction if the minor trend changes to down.
The minor trend is up. A trade through 7879.50 will make 7755.50 a new minor bottom. As of Friday’s close, a trade through 7660.25 will change the minor trend to down. This will also shift momentum to the downside. This is followed by a pair of minor bottoms at 7598.75 and 7575.75.
The first minor 50% level or pivot is at 7769.75. The second minor pivot is 7739.00 and the third minor pivot is 7727.50.
The main range is 7276.00 to 7879.50. If the minor trend changes to down then look for a correction into its retracement zone at 7577.75 to 7506.50. Since the main trend is up, a break back into this zone will likely attract new buyers.
Daily Swing Chart Technical Forecast
Based on Friday’s price action and the close at 7840.25, the direction of the June E-mini NASDAQ-100 on Monday is likely to be determined by trader reaction to the minor top at 7879.50.
Taking out 7879.50 will indicate the buying is getting stronger. There is no resistance at this time, but buyers will have to watch for a closing price reversal top. This chart pattern will not change the trend, but it could lead to a short-term correction.
The inability to overcome 7879.50 will signal the presence of sellers. This could drive the index back into the first short-term pivot at 7769.75. The next downside targets are Friday’s low at 7755.50, and a pair of pivots at 7739.00 and 7727.50.
The daily chart starts to open up to the downside under 7727.50. This could trigger an acceleration to the downside with the first target the minor bottom at 7660.25.
Closing Price Reversal Top Scenario
Due to the prolonged move up in terms of price and time, traders have to be aware of the possibility of a closing price reversal top. Taking out 7879.50 then turning lower for the session will put the index in a position to post the potentially bearish chart pattern. A higher-high, lower-close could trigger the start of a near-term correction.