E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Breakout Over 6416.00 or Reverse Under 6389.50?
December E-mini NASDAQ-100 Index futures finished at a record close on Friday as investors responded to dovish Fed minutes and robust holiday sales on Black Friday. Investors liked the minutes because they strongly suggested the Fed would only raise rates as many as two times in 2018 rather than the previously forecast three times.
Strong Black Friday sales helped drive up shares of Apple and Amazon which are major components of the NASDAQ Composite Index.
Daily Swing Chart Analysis
The main trend is up according to the daily swing chart. Given the prolonged move up in terms of price and time, the only chart pattern that can stop this rally at least temporarily is the closing price reversal top.
A trade through 6416.00 will signal a resumption of the uptrend.
Taking out 6416.00 then breaking back under Friday’s close as 6389.50 will signal that the selling is greater than the buying at current price levels. A close below this level will form a potentially bearish closing price reversal top. This could lead to the start of a 2 to 3 day correction.
A trade through 6230.75 will change the main trend to down. This could lead to the start of a steep correction with 6011.00 the next major downside target.
The short-term range is 6230.75 to 6416.00. Its retracement zone is 6323.25 to 6301.50.
The intermediate range is 6011.00 to 6416.00. Its retracement zone comes in at 6213.50 to 6165.75.
The main range is 5760.00 to 6416.00. 6088.00 to 6010.50 is its retracement zones.
Any of the retracement zones are potential buying areas especially when combined with main bottoms.
Daily Swing Chart Forecast
The direction of the index on Monday is likely to be determined by trader reaction to last week’s high at 6416.00 and Friday’s close at 6389.50.
A sustained move over 6416.00 will indicate the buying is getting stronger. A sustained move under 6389.50 may signal the absence of buyers, or that sellers are regaining control.
This article was originally posted on FX Empire