E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trader Reaction to 7948.00 Sets the Tone

June E-mini NASDAQ-100 Index futures are edging higher shortly before the regular session opening on Wednesday. There was no follow-through to the downside following yesterday’s potentially bearish closing price reversal top. During the previous cash market session, the NASDAQ Composite closed the day down 0.3% following a 3% rally.

The early price action suggests volatility is likely to remain for some time as investors are being forced to choose between following the coronavirus data and the economic data. It also indicates that investors may be getting ahead of reality where coronavirus shutdowns are likely to weigh on the economy significantly beyond the second quarter.

At 11:02 GMT, June E-mini NASDAQ-100 Index futures are trading 8058.50, up 46.50 or +0.58%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, yesterday’s closing price reversal top is an early sign that momentum may be getting ready to shift to the downside.

A trade through 8303.25 will negate the closing price reversal top and signal a resumption of the uptrend.

A move through 7948.00 will confirm the closing price reversal top. This won’t change the trend to down but it will shift momentum. A trade through 7376.00 will change the main trend to down.

On the upside, the major resistance is a retracement zone at 8304.75 to 8653.00.

The index is currently straddling a retracement zone at 7817.75 to 8098.50.

The short-term range is 6628.75 to 8303.25. Its retracement zone at 7469.25 to 7270.25 is a potential downside target.

Daily Technical Forecast

Based on the early price action, the direction of the June E-mini NASDAQ-100 Index the rest of the session on Wednesday will be determined by trader reaction to 7948.00.

Bullish Scenario

A sustained move over 7948.00 will indicate the presence of buyers. This could trigger a labored rally with potential resistance at 8098.50, 8164.75 and 8174.75.

A move through 8174.75 could trigger a surge into 8303.25 and 8304.75. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 7948.00 will signal the presence of sellers. This will also confirm the reversal top. The first target angle comes in at 7888.00. If this angle fails then look for the selling to extend into 7817.75.

The 50% level at 7817.75 is a potential trigger point for an acceleration into 7632.00.

Ultimately, we’re looking for a correction into 7469.25 to 7270.25 over the short-run.