March E-mini NASDAQ-100 Index futures are under pressure on Thursday following yesterday’s strong rally. There was no follow-through to the upside following yesterday’s rally which indicates the move was likely fueled by short-covering and thin-post holiday trading conditions. We’re expecting more volatility today with the possibility of a two-sided trade as the index currently sits inside a pair of retracement zones that are controlling the direction of the index.
At 1600 GMT, March E-mini NASDAQ-100 Index futures are trading 6421.22, down 133.14 or -2.03%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. Yesterday’s closing price reversal chart pattern did not affect the trend, but it did suggest the selling may be greater than the buying at current price levels. It also indicates that the index may be getting close to shifting momentum to the upside.
A trade through 5820.50 will negate the closing price reversal bottom and signal a resumption of the downtrend. A trade through 6310.00 will confirm the closing price reversal bottom. This will also shift momentum to the upside. The main trend will change to up on a move through 6897.00.
The major support zone is 5866.50 to 5421.00.
The main range is 6897.00 to 5820.50. Its retracement zone at 6358.75 to 6485.75 is the primary upside target. Since the main trend is down, sellers may come in on a test of this zone. They are going to try to form a secondary lower top.
The short-term range is 5820.50 to 6310.00. Its retracement zone at 6065.25 to 6007.50 is the primary downside target. Aggressive counter-trend buyers could step in on a test of this zone. They will be trying to produce a secondary higher bottom.
Daily Swing Chart Technical Forecast
Based on the early price action and the downside momentum, sellers are likely to drive the market into the short-term retracement zone at 6065.25 to 6007.50. Watch for buyers to step in on the first test of this zone. If successful, we could see a rebound rally with potential upside targets at 6310.00 and 6358.75. The rally will strengthen over 6358.75 with 6485.75 the next target.
If 6007.50 fails as support then look for a potential acceleration to the downside with the next target the major 50% level at 5866.50. This is followed by the closing price reversal bottom at 5820.50. Taking out this level will signal a resumption of the downtrend with the July 5, 2017 main bottom the next target.