E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Three Inside Moves Means Impending Volatility

December E-mini NASDAQ-100 Index futures closed lower last week, dragged down by a poor performance in Apple stock. For a third week, the market traded inside the range from the week ending September 1. This indicates investor indecision and impending volatility. It could also mean the market is going through a transition period from bullish to bearish.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through 6025.75 will signal a resumption of the uptrend. There is no true resistance at this time, but a weekly closing price reversal top will signal that the selling is greater than the buying at current price levels.

A trade through 5760.00 will turn the main trend down on the weekly chart. This could lead to a further break into the next main bottom at 5577.00.

Taking out 5577.00 could lead to an acceleration to the downside.

The main range is 4646.25 to 6025.75. If there is a steep sell-off, the index will eventually trade into the major retracement zone at 5336.00 to 5173.25.

Weekly Forecast

Based on last week’s close at 5935.75, the direction of the index this week is likely to be determined by trader reaction to the uptrending angle at 5961.00.

A sustained move under 5961.00 will signal the presence of sellers. This could trigger a further decline into the main bottom at 5760.00 then the short-term uptrending angles at 5769.00 and 5673.00. The latter is the last potential support angle before the 5577.00 main bottom.

A sustained move over 5961.00 will indicate the presence of buyers. If the buying strengthens then look for a move into 6025.75.

Taking out 6025.75 will produce a new record high. The next target angle over the top is 6150.25. Overtaking this angle will put the index in an extremely strong position.

Watch the price action and read the order flow at 5961.00 all week. Trader reaction to this angle will tell us if the selling pressure is increasing or if buyers are coming back in to support the rally. The weekly chart also indicates that the way of least resistance is down.