E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 7910.75, Weakens Under 7797.25

Based on Friday’s price action, the direction of the September E-mini NASDAQ-100 Index on Monday is likely to be determined by trader reaction to 7797.25.
James Hyerczyk
E-mini NASDAQ-100 Index

September E-mini NASDAQ-100 Index futures finished lower on Friday, but still managed to post a solid weekly gain. After a steady-to-higher trade earlier in the session, prices sold-off sharply in response to solid U.S. employment data, which dampened the chances of a Fed rate cut in late July. The news raised uncertainty, and this usually encourages investors to pare long positions and move to the sidelines.

On Friday, September E-mini NASDAQ-100 Index futures settled at 7851.50, down 36.00 or -0.46%.

The price action indicates that the seven day rally may have been overextended and too speculative. Prior to the release of the jobs report, Treasury traders had priced in a 120% chance of at least a 25 basis point rate cut by the Fed. After the numbers came out, 10-year Treasury yields surged through 2.00% to 2.05%, reducing the chance of a quarter-point rate cut to 100%.

Daily September E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, Friday’s closing price reversal top indicates momentum may be getting ready to shift to the downside.

A trade through 7797.25 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction.

A move through 7909.75 will negate the closing price reversal top. This will signal a resumption of the uptrend. Taking out the April 25 top at 7910.75 will reaffirm the uptrend.

The minor trend will change to down on a move through 7609.50. The main trend will change to down on a move through 7446.25.

The minor range is 7609.50 to 7909.75. The first downside target is its 50% level or pivot at 7759.50.

The short-term range is 7446.25 to 7909.75. Its retracement zone at 7678.00 to 7623.25 is the next target zone.

The main range is 6969.00 to 7909.75. If the minor and main trends change to down then look for a potential break into its retracement zone at 7439.25 to 7328.25.

Daily Swing Chart Technical Forecast

Based on Friday’s price action, the direction of the September E-mini NASDAQ-100 Index on Monday is likely to be determined by trader reaction to 7797.25.

Bullish Scenario

A sustained move over 7797.25 will indicate the presence of buyers. If this move creates enough upside momentum then look for buyers to go after 7909.75 and 7910.75. Taking out these levels will mean the buying is getting stronger. These are trigger points for a potential acceleration to the upside.

Bearish Scenario

Taking out 7797.25 will confirm the closing price reversal top. The first downside target is the pivot at 7759.50.

If 7759.50 fails as support then look for the selling to possibly extend into the short-term retracement zone at 7678.00 to 7623.25, followed by the minor bottom at 7609.50.

Look out to the downside if 7609.50 fails as support.

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