E-mini NASDAQ-100 Index

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Weekly Trigger Point for Major Upside Breakout 7240.00

December E-mini NASDAQ-100 Index futures settled higher last week and nearly closed on its high as the highest ranking Fed official signaled a slowdown in interest rate hikes and an official from China sounded optimistic about the crucial meeting between United States President Donald Trump and China’s President Xi Jinping this week-end at the G20 summit in Argentina.

Last week, December E-mini NASDAQ-100 Index futures settled at 6949.50, up 418.50 or +6.41%.

Fed Chair Jerome Powell ignited last week’s rally when he said the Fed was nearing neutral and suggested the central bank would reduce the number of planned rate hikes next year. Trump and Xi will be meeting to put an end to the trade dispute that could escalate if a deal isn’t reached.

Technology stocks could soar, especially shares of Apple, if the U.S. and China decide to freeze tariffs and negotiate, or rollback tariffs with the latter being the best outcome.

E-mini NASDAQ-100 Index
Weekly December E-mini NASDAQ-100 Index

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. The market is far from changing the trend to up, but it is in a position to put together a strong rally. The main trend will change to up on a trade through 7728.75. A move through 6449.50 will signal a resumption of the downtrend. This could lead to a test of a pair of bottoms at 6399.75 and 6385.25. The latter is potential trigger point for an acceleration to the downside.

The minor trend is also down. A trade through 7231.00 will change the minor trend to up and shift momentum to the upside.

Given the weekly close at 6949.50, retracement level support comes in at 6905.50, 6820.00 and 6607.00. Retracement level resistance is 7061.75, 7089.25 and 7240.00.

Weekly Swing Chart Technical Forecast

Based on last week’s close at 6949.50, the direction of the December E-mini NASDAQ-100 Index futures contract this week is likely to be determined by trader reaction to the Fibonacci level at 6905.50.

Bullish Scenario

A sustained move over 6905.50 will indicate the presence of buyers. This could trigger a rally into a resistance cluster at 7061.75 to 7089.25. Sellers may come in on the first test of this zone.

Overtaking 7089.25 could trigger an acceleration into the next major target at 7240.00. The daily chart indicates there is plenty of room to the upside over this level with 7728.75 the next major upside target.

Bearish Scenario

A sustained move under 6905.50 will signal the presence of sellers. The first target is 6820.00. The daily chart begins to open up to the downside under this level with 6607.00 the next major target.

The index will continue to weaken under 6607.00 with targets at 6449.50, 6399.75 and 6385.25.

Lookout to the downside if 6385.25 fails with the next major target the September 25, 2017 main bottom at 5916.75.

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.