E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strong Recovery Sets Up Test of 16438.75 – 16460.00

March E-mini NASDAQ-100 Index futures are trading higher late Wednesday after cutting earlier losses as investors overcame another big hurdle heading into year-end. The Federal Reserve signaled a more aggressive unwinding of its monthly bond buying, as expected by the market, and forecast multiple rate hikes on the way next year.

The more aggressive moves by the Fed didn’t seem to rattle investors, who drove the index higher after prices hit bargain-basement levels earlier in the session.

At 20:20 GMT, March E-mini NASDAQ-100 Index futures are trading 16192.75, up 270.50 or +1.70%. The Invesco QQQ Trust Series 1 ETF (QQQ) is at $394.87, up $6.73 or +1.73%.

After initially finding support following the release of the Fed statement, the index advanced further after Fed Chairman Jerome Powell said at a news conference that the labor market is not fully recovered, pointed to a sluggish rebound in labor force participation, but said it was still appropriate to roll back some of the Fed’s pandemic-era policies.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 16438.75 will change the main trend to up. A move through 15547.25 will signal a resumption of the downtrend.

The minor trend is also down, but a new minor bottom has formed at 15734. 00.

The minor range is 15547.25 to 16438.75. The market is currently trading on the strong side of its retracement zone at 15993.00 to 15887.75, making it support.

The short-term range is 16768.00 to 15547.25. The index is currently testing its retracement zone at 16157.75 to 16301.75.

The major support zone is 15567.25 to 15284.00.

Short-Term Outlook

The direction of the March E-mini NASDAQ-100 Index futures contract on Wednesday is likely to be determined by trader reaction to 16157.50.

Bullish Scenario

A sustained move over 16157.75 will indicate the presence of buyers. The next upside target is 16301.75.

Overtaking 16301.75 will indicate the buying is getting stronger, putting the index in a position to challenge a pair of main tops at 16438.75 and 16460.00. Taking out these tops will change the main trend to up and could trigger an acceleration into 16768.00.

Bearish Scenario

A sustained move under 16157.50 will signal the presence of sellers. This could trigger a late session pullback into the minor retracement zone at 15993.00 to 15887.75.