E-mini NASDAQ-100: Testing Short-Term Retracement Zone

June E-mini NASDAQ-100 Index futures are inching higher early Tuesday after posting a potentially bullish closing price reversal bottom the previous session. The chart pattern reflects a divergence with the cash market NASDAQ Composite which finished lower.

After Monday’s session saw all three benchmarks slip between positive and negative territory, the index is moving slightly higher, but the buying is a little tentative with investors monitoring surging bond yields ahead of further earnings cues this week.

At 03:20 GMT, June E-mini NASDAQ-100 Index futures are trading 13976.75, up 69.00 or +0.50%. On Monday, the Invesco QQQ Trust Series 1 ETF (QQQ) settled at $338.96, up $0.53 or +0.16%.

Monday Recap

Twitter rose 7.5% as the micro-blogging site adopted a “poison pill” on Friday to restrict Tesla CEO Elon Musk from raising his stake to beyond 15% for a one-year period. Tesla rose 2% as it prepares to reopen its Shanghai plant following a near three-week COVID shutdown.

Looking Ahead …

Market participants are bracing for a barrage of earnings that will help them assess the impact of the Ukraine war and a spike in inflation on company financials. Netflix, Tesla and International Business Machines are all to report this week.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher following the confirmation of Monday’s closing price reversal bottom.

A trade through 15198.00 will change the main trend to up. A move through 13729.50 will negate the closing price reversal top and signal a resumption of the downtrend.

The minor trend is also down. A trade through 14296.25 will change the minor trend to up. This will confirm the shift in momentum.

The short-term range is 12942.50 to 15268.75. The index is currently testing its retracement zone at 14105.75 to 13831.00.

The minor range is 15198.00 to 13729.50. If the minor trend changes to up then its pivot at 14539.75 will become the next target.

The main range is 16700.00 to 12942.50. Its retracement zone at 14821.25 to 15264.75 is the strongest resistance.

Daily Swing Chart Technical Forecast

The direction of the June E-mini NASDAQ-100 Index on Tuesday is likely to be determined by trader reaction to 13831.00.

Bullish Scenario

A sustained move over 13831.25 will indicate the presence of buyers. The first upside target is a 50% level at 14105.75. Overtaking this level could drive the index into the minor top at 14296.25.

Taking out 14296.25 will change the minor trend to up and could trigger a further rally into the pivot at 14539.75.

Bearish Scenario

A sustained move under 13831.25 will signal the presence of sellers. The first target is the minor bottom at 13729.50. This is a potential trigger point for an acceleration to the downside with the next major target coming in at 12942.50.