E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trend Up, but Momentum Starting to Shift Downward

September E-mini NASDAQ-100 Index futures are treading water shortly after the mid-session after giving back earlier gains. The tech-heavy index jumped after the cash market opening after last Friday’s blow-out U.S. jobs report soothed some fears about an economic slowdown.

Gains were limited, however, due to a warning on revenue from chipmaker Nvidia and as traders squared positions ahead of Wednesday’s key U.S. consumer price index (CPI) report. Some traders also expressed concerns over hawkish expectations from the U.S. Federal Reserve.

At 17:32 GMT, September E-mini NASDAQ-100 Index futures are trading 13190.75, down 38.00 or -0.29%. The Invesco QQQ Trust ETF (QQQ) is at $321.09, down $0.66 or -0.20%.

Nvidia Warns on Second-Quarter Revenue

Nvidia shares dipped 8% on Monday morning after the company released preliminary earnings that show second-quarter revenue of $6.7 billion, well below its initial outlook of $8.1 billion.

New CPI Reading Sets the Tone Later in Week

A new reading for the consumer price index (CPI), slated for release Wednesday, will give investors more clarification about the central bank’s next move at its policy meeting in September. Headline CPI, which includes energy and food, is expected to dip to 8.7% in July, from a 40-year high of 9.1% in June, according to Dow Jones estimates.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but the intraday price action suggests momentum may be getting ready to shift to the downside.

A trade through the intraday high at 13419.25 will signal a resumption of the uptrend. A move through the main top at 13582.75 will reaffirm the uptrend.

The minor trend is also up. A trade through the minor bottom at 13085.00 will change the minor trend to down. This will shift momentum to the downside.

On the upside, the next resistance is a retracement zone at 13812.00 to 14459.50.

On the downside, the key support is a retracement zone at 13082.50 to 12698.00.

Daily Swing Chart Technical Forecast

Trader reaction to 13228.75 is likely to determine the direction of the September E-mini NASDAQ-100 Index into the close on Monday.

Bearish Scenario

A sustained move under 13228.75 will indicate the presence of sellers. The first downside target is a support cluster at 13085.00 to 13082.50.

Taking out the Fibonacci level at 13082.50 will indicate the selling pressure is getting stronger with the 50% level at 12698.00 the next likely target.

Bullish Scenario

A sustained move over 13228.75 will signal the presence of buyers. If this generates enough upside momentum then look for a surge into the intraday high at 13419.25, followed by the May 4 main top at 13582.75.

Side Notes

A close under 13228.75 will form a potentially bearish closing price reversal top. If confirmed, it won’t change the trend, but momentum will shift to the downside. This could lead to a 2 to 3 day correction.