After an early setback, the December E-mini NASDAQ-100 Index rebounded enough to post a higher close for the week. The rally was fueled by a strong recovery in technology stocks. Investors primarily ignored the threat of higher interest rates, instead choosing to focus on the Trump Administration’s long-awaited tax reform plan, appears to be favorable for business.
Weekly Technical Analysis
The main trend is up according to the weekly swing chart. However, momentum has been trending sideways for four weeks. A trade through 6025.75 will signal a resumption of the uptrend.
A move through 5760.00 will change the main trend to down according to the weekly swing chart. This could trigger a further break into the next main bottom at 5577.00.
The short-term range is 5577.00 to 6025.75. Its retracement zone at 5801.25 to 5748.00 is new support.
Weekly Forecast
Based on Friday’s close at 5982.50 and last week’s price action, the direction of the index this week is likely to be determined by trader reaction to the steep uptrending angle at 5993.00.
Buyers are going to have some work on their hands early this week, but if they can overcome the angle at 5993.00 then the sailing should go more smoothly the rest of the week.
A sustained move over 5993.00 will indicate the presence of buyers. This move could create enough upside momentum to drive the index into the contract high at 6025.75. Overtaking this high could fuel a rally into a long-term uptrending angle at 6150.45. Crossing to the strong side of this angle will put the index in an extremely strong position.
The inability to overcome 5993.00 will not necessarily indicate the presence of sellers, but I could be an indication that the buying is weak.
If sellers do come in strong then we could see a drive into the short-term retracement zone at 5801.25 to 5748.25. Inside this retracement zone is a short-term uptrending angle at 5785.00 and the main bottom at 5760.00. Both points should be considered valid targets.
This week, the focus should be on 5993.00. A sustained move over this uptrending angle will mean the buying is getting stronger. A sustained move under this angle will indicate the buying is weak, or that the selling is getting stronger.
This article was originally posted on FX Empire