E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trading on Strong Side of Major Retracement Zone at 7022.25 to 6792.75

March E-mini NASDAQ-100 Index futures finished higher on Tuesday, led by another strong performance in Apple. Shares of the communications giant rose more than 1 percent.

On Monday, the stock posted gains of more than 3 percent after Bank of America Merrill Lynch upgraded the stock to buy from neutral. Bank of America analysts noted the company’s recent pullback presents “opportunity.” The bank also raised its 12-month price target to $210 per share from $180.00.

At 22:00 GMT, March E-mini NASDAQ-100 Index futures are trading 7205.25, down 1.25 or -0.02%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up when buyers took out the previous main top at 7211.50 on Tuesday. The new main bottom is 6939.00. A trade through this level will change the main trend to down.

The main range is 7765.00 to 5820.50. Its 50% to 61.8% retracement zone is 7022.25 to 6792.75. This zone is support. Holding above this zone is helping to generate a strong upside bias. The area is controlling the longer-term direction of the index.

Daily Technical Forecast

Based on Tuesday’s price action, the direction of the March E-mini NASDAQ-100 Index on Wednesday is likely to be determined by trader reaction to the former main top at 7211.50.

Bullish Scenario

A sustained move over 7211.50 will indicate the presence of buyers. If this generates enough upside momentum then look for a rally into the November 8 main top at 7262.00. Taking out this top will reaffirm the uptrend with the downtrending Gann angle at 7322.75 the next upside target.

Sellers could show up on the first test of 7322.75, but taking it out could trigger an acceleration into the October 17 main top at 7403.75.

Bearish Scenario

A sustained move under 7211.50 will signal the return of sellers. It will also indicate that Tuesday’s rally was likely fueled by short-covering and buy stops rather than aggressive buying. The first minor target is a 50% level at 7081.

If 7081.00 fails as support then look for the selling to possibly extend into the long-term Fibonacci level at 7022.25. This level is major support so look for buyers to show up on a test of this level. If it fails then the uptrend could be challenged.