Technology stocks are under pressure on Wednesday, shortly before the cash market opening. On-going trade tensions and worries about global economic growth are the catalysts behind the selling pressure. Not only are investors concerned about an escalation of the trade dispute but also on the table is a simmering technology war between the United States and China over the business practices of Huawei. Furthermore, on Tuesday, China may have made a veiled threat over perhaps limiting the export of rare earth metals, a key component to the technology industry.
At 10:02 GMT, June E-mini NASDAQ-100 Index futures are trading 7231.00, down 64.25 or -0.88%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 7268.00 confirmed the downtrend earlier today. The main trend will change to up on a move through 7641.00. This is highly unlikely, but with the index down eight sessions from its last main top, bearish sellers have to try to avoid getting caught in a closing price reversal bottom.
On the upside, the nearest resistance is the Fibonacci level at 7314.75. This is followed by a 50% level at 7422.75.
On the downside, the nearest target is the Fibonacci level at 7035.00.
Daily Technical Forecast
Based on the early price action, the direction of the June E-mini NASDAQ-100 Index futures contract is likely to be determined by trader reaction to the Fibonacci level at 7314.75.
A sustained move under 7314.75 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling pressure to possibly increase. The first downside target is a steep downtrending Gann angle at 7143.50. Crossing to the weak side of the angle will put the index in a bearish position with 7035.00 the next major target.
A sustained move over 7314.75 will signal the return of buyers. If this creates enough upside momentum then look for a potential surge into the downtrending Gann angle at 7385.00. Overtaking this angle could drive the index into 7422.75.
This article was originally posted on FX Empire
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