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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Return of Sellers Could Drive Market into 6111.50 to 6042.75 Retracement Zone

James Hyerczyk

March E-mini NASDAQ-100 Index futures rose for a third session on Friday, but sellers took control late in the session, leading to a lower close. The selling pressure was likely fueled by a combination of profit-taking and position-squaring ahead of the long holiday week-end that is likely to extend to Wednesday.

On Friday, the March E-mini NASDAQ-100 Index futures settled at 6293.25, down 30.25 or -0.48%.

Daily March E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside with the formation of the closing price reversal bottom on December 26 and the subsequent confirmation of the chart pattern on December 27.

A move through 6402.50 will indicate the return of buyers, but the main trend won’t change to up until the main top at 6897.00 is taken out. A trade through 5820.50 will negate the closing price reversal bottom and signal a resumption of the downtrend.

From the bottom up, the major support zone is the long-term 50% level at 5866.50 and a pair of bottoms at 5688.50 and 5686.50.

The short-term range is 5820.50 to 6402.50. Its retracement zone at 6111.50 to 6042.75 is the primary downside target.

The intermediate range is 6897.00 to 5820.50. Its retracement zone at 6358.75 to 6485.75 acted like resistance on Friday with the high occurring inside this zone at 6402.50.

The main range is 7169.00 to 5820.50. Its retracement zone at 6494.75 to 6654.00 is the primary upside target.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at 6293.25, the direction of the March E-mini NASDAQ-100 Index is likely to be determined by trader reaction to the 50% level at 6358.75.

Bullish Scenario

A sustained move over 6358.75 will indicate the presence of buyers. The first target is Friday’s high at 6402.50. Taking out this level will extend the rally into the main 50% level at 6494.75. Since the main trend is down, we’re likely to see sellers show up on a test of this level. Overtaking this level could trigger an acceleration to the upside with the next target the main Fibonacci level at 6654.00.

Since the main trend is down, look for a labored rally.

Bearish Scenario

A sustained move under 6358.75 will signal the presence of sellers. This could trigger an acceleration to the downside with the short-term retracement zone at 6111.50 to 6042.75 the primary downside target.

This article was originally posted on FX Empire

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