E-Mini NASDAQ Building Support Base inside Retracement Zone

James Hyerczyk
Published: Jan 28, 2022, 21:33 GMT+00:00

A trade through 14639.75 will change the minor trend to up and confirm a shift in momentum.

E-mini NASDAQ-100 Index

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March E-mini NASDAQ-100 Index futures are trading higher shortly after the cash market close on Friday as counter-trend buyers continue to build a support base following a steep sell-off on Monday.  The tech-heavy NASDAQ Composite finished in positive territory with gains led by Apple Inc.

Big Tech names Microsoft, Amazon, Facebook-parent Meta, Google-parent Alphabet all closed Friday higher after being trounced earlier in the week.

At 21:09 GMT, March E-mini NASDAQ-100 Index futures are at 14433.25, up 446.50 or +3.19%. The Invesco QQQ Trust Series ETF 1 (QQQ) settled at $351.92, up 10.82 or +3.17%.

Shares of Apple rallied nearly 7% after announcing stellar quarterly results. The communications company reported its largest single quarter in terms of revenue ever even amid supply challenges and the lingering effects of the pandemic.

Daily March E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom on January 24.

A trade through 13706.00 will negate the chart pattern and signal a resumption of the downtrend. A move through 16009.25 will change the main trend to up.

The minor trend is also down. A trade through 14639.75 will change the minor trend to up. This will confirm the shift in momentum.

The index is currently trading inside a longer-term retracement zone at 14515.75 to 13984.25.

On the upside, additional resistance is a minor pivot at 14857.75, followed by a short-term retracement zone at 15182.75 to 15531.25.

Short-Term Outlook

The near-term direction is likely to be determined by trader reaction to the longer-term retracement zone.

Look for an upside bias to develop on a sustained move over 14515.75. Taking out 14639.75 will confirm the positive shift in momentum. However, we’re looking for a labored rally on a test of 14857.75, 15182.75 and 15531.25.

The Fib level at 15531.25 is a potential trigger point for an acceleration to the upside.

A sustained move under 13984.25 will indicate the return of sellers. This could trigger a further break into 13706.00. Taking out this level could trigger an acceleration to the downside with the May 12, 2021 main bottom at 12968.00 the next major target.

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About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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