E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trader Reaction to 12526 Sets the Tone into Close

December E-mini NASDAQ-100 Index futures extended a rally to hit a record high on Monday as investors piled into big technology stocks on worries over the short-term hit to the economy from COVID-19 restrictions.

Shares in companies including Apple Inc, Tesla Inc, Facebook Inc and Microsoft Corp boosted the NASDAQ with gains of nearly 2% each.

At 16:09 GMT, December E-mini NASDAQ-100 Index futures are trading 12601.50, up 75.50 or +0.60%.

Authorities in California, the most populous state in the country, on Monday compelled much of the state to close shop and stay at home the day after it reported a record 30,000-plus new coronavirus cases.

In other news, talks aimed at delivering fresh coronavirus aid gathered momentum in the U.S. Congress on Friday, as a bipartisan group of lawmakers worked to put the finishing touches on a new $908 billion bill.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out Thursday’s high at 12540.25. The main trend changes to down on a move through 10942.25.

The minor trend is also up. A trade through 12086.00 will change the minor trend to down. This will also shift momentum to the downside.

Due to the prolonged move up in terms of price and time, the index is ripe for a closing price reversal top. This puts Friday’s close at 12526 in focus especially into today’s close.

Daily Swing Chart Technical Forecast

The direction of the December E-mini NASDAQ-100 Index into the close is likely to be determined by trader reaction to 12526.

Bullish Scenario

A sustained move over 12526 will indicate the presence of buyers. Taking out the intraday high at 12612.25 will indicate the buying is getting stronger. This could trigger an acceleration to the upside since there is no true resistance.

Bearish Scenario

A sustained move under 12526 will signal the presence of sellers. This could trigger a break into the pivot at 12349.00. Watch for a technical bounce on the first test of this level. If it fails then look for the selling to possibly extend into the minor bottom at 12086.00.

A close under 12526 could trigger the start of a 2 to 3 day correction.