E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Traders Still ‘Buying the Dip’
March E-mini NASDAQ-100 Index futures are trading slightly lower shortly before the cash market close. Earlier in the session, the index traded sharply lower as a forecast warning from tech giant Apple stoked fears over the coronavirus and its impact on corporate profits and the global economy.
At 20:49 GMT, March E-mini NASDAQ-100 Index futures are trading 3631.25, down 1.00 or -0.01%.
Buyers came in on the dip again and clawed back all of those earlier losses, turning the index higher on the day. The rally was partially fueled by a strong performance by Netflix, which rose 2.3% and reached its highest level since July 2018. Meanwhile, Alphabet (Google’s parent) gained 0.2% to eke out an all-time high. Tesla also contributed to the gains, rising more than 7%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 9659.25 will signal a resumption of the uptrend. The main trend will change to down on a move through 8966.00. This is highly unlikely, but due to the prolonged move up in terms of price and time, the index is inside the window of time to produce a potentially bearish closing price reversal top.
The minor trend is also up. A trade through 9511.25 will change the minor trend to down. This will also shift momentum to the downside.
The first minor range is 9511.25 to 9659.25. Its 50% level or pivot comes in at 9585.25. Traders straddled this level on Tuesday.
The second minor range is 9330.75 to 9659.25. Its 50% level or pivot at 9495.00 is the second downside target.
The main range is 8966.00 to 9659.25. Its retracement zone at 9312.50 to 9230.75 is major support. This is also a value area.
Tuesday’s strong recovery in the March E-mini NASDAQ-100 Index after a steep opening indicates that investors are still buying dips. Holding above the pivot at 9585.25 into the close will indicate the presence of buyers late in the session.
This will put the index in a position to form a new all-time high on Wednesday.
The price action suggests that the index will continue to move higher over the near-term until there is a break in the pattern. Buying one-day breaks and forming minor bottoms is the pattern. Basically, the first sign of weakness will be more than one day of lower lows. The best sign of a top will be a closing price reversal top.
Time has to overbalance price in order to start a decent break.