E-mini NASDAQ-100 Index

E-mini NASDAQ-100 in Position to Form Reversal Bottom

June E-mini NASDAQ-100 Index futures are trading higher late in the session on Tuesday as traders reacted to lower oil prices and hopes of peace between Ukraine and Russia. The price action also suggests that investors have already priced in a 25-basis point rate hike by the Fed on Wednesday although they still aren’t sure how aggressive the central bank will be this year in combating rising inflation.

At 18:42 GMT, June E-mini NASDAQ-100 Index futures are trading 13329.50, up 285.50 or +2.19%. The Invesco QQQ Trust Series 1 ETF (QQQ) is at $324.94, up $6.77 or +2.13%.

Tech stocks are leading the bounce after recent losses. Index components Microsoft and Netflix rose more than 2% after Wall Street analysts reiterated their overweight ratings. Apple and Meta Platforms gained more than 1%. Oracle climbed 5%.

Daily June E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 13858.00 will change the main trend to up. A move through the intraday low at 12942.50 will signal a resumption of the downtrend.

The minor range is 13858.00 to 12942.50. Its pivot at 13400.25 is intraday resistance.

Additional resistance is a series of potential resistance levels at 13665.75, 13803.75 and 14102.00.

Short-Term Outlook

During the pre-market session, the June E-mini NASDAQ-100 Index took out the May 12, 2021 main bottom at 12957.25. The selling pressure came to a halt at 12942.50, however. This triggered a strong short-covering rally.

The subsequent intraday rally turned the index higher for the session. A close over 13044.00 will form a potentially bullish closing price reversal bottom. If confirmed on Wednesday, this could trigger the start of a 2 to 3 day counter-trend rally.

A closing price reversal bottom doesn’t change the main trend to up, but it often indicates the selling is greater than the buying at current price levels.

Tuesday’s rally looks like investors found value at 12957.25 to 12942.50. The intraday rally could be a combination of new buying and position-squaring ahead of the Fed announcements on Wednesday. One could even build a case for strong hopes for a ceasefire in Ukraine.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.