E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trade Through 16452.25 Confirms Reversal Top

view original post

March E-mini NASDAQ-100 Index futures are inching higher early Wednesday after posting a potentially bearish closing price reversal top in the previous session. The move followed a test of its highest level since November 22.

The price action suggests investors may be booking profits and trimming positions ahead of the upcoming New Year holiday. Despite five days of higher highs and higher lows, trading volume is well-below average and expected to tail-off as we approach the weekend holiday.

Daily March E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the formation of a closing price reversal top on Tuesday suggests momentum may be getting ready to shift to the downside.

A trade through 16659.50 will negate the closing price reversal top and signal a resumption of the uptrend.

Taking out 16452.25 will confirm the closing price reversal top. This could trigger a 2 to 3 day correction into the retracement zone at 16075.75 to 15938.00.

On the upside, the major target is the all-time high at 16768.00.

On the downside, the nearest support is a short-term retracement zone 16280.50 to 16130.00. This is followed by a minor retracement zone at 16075.75 to 15938.00.

Combining these two retracement zones creates a support cluster at 16130.00 – 16075.75.

Daily Swing Chart Technical Forecast

The direction of the March E-mini NASDAQ-100 Index on Wednesday is likely to be determined by trader reaction to 16556.00.

Bullish Scenario

A sustained move over 16556.00 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of 16659.50.

Taking out 16659.50 will indicate the buying is getting stronger. This could extend the rally into 16768.00.

Bearish Scenario

A sustained move under 16555.75 will signal the presence of sellers. Taking out 16452.25 will confirm the closing price reversal top. If this generates enough downside momentum then look for the selling to possibly extend into the short-term Fibonacci level at 16280.50, followed by 16130.00 – 16075.75.

Since the main trend is up, buyers are likely to come in on any pullback into support.