New Zealand markets open in 7 hours 26 minutes

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trying to Build Support Base at 8628.50 – 8360.75

James Hyerczyk

March E-mini NASDAQ-100 Index futures are trading higher shortly after the cash market opening. After a volatile start to the day in the pre-market session, the index seems to be stabilizing as investors continue to assess the impact of the coronavirus on the U.S. economy.

Comments from Federal Reserve Chairman Jerome Powell on Friday seem to have slowed down the selling pressure, but have not really brought in enough buyers to retake much of last week’s steep losses, which put the index in correction territory.

Powell said the fundamentals of the U.S. economy remained strong and that the central bank stands ready to “act as appropriate” to support the economy and stock market in the face of risks posed by the coronavirus epidemic. There is also chatter on Wall Street this morning that the major central banks are discussing a coordinated rate cut for Wednesday. Furthermore, U.S. traders are indicating a 100% chance of a 25 basis point rate cut by the Fed at its March 17-18 meeting.

At 14:42 GMT, March E-mini NASDAQ-100 Index futures are trading 8521.75, up 67.75 or +0.80%. The high of the session is 8677.25 and the low is 8224.25.

Daily March E-mini NASDAQ-100 Index

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, Friday’s closing price reversal bottom and today’s subsequent confirmation of the chart pattern has shifted momentum to the upside.

A trade through 8126.25 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend will change to up on a move through 9763.00.

The main range is 7494.00 to 9763.00. Its retracement zone at 8628.50 to 8360.75 is potential support. The market has straddled this zone the past three sessions.

The new minor range is 9763.00 to 8126.25. Its retracement zone at 8944.75 to 9136.75 is the primary upside target.

Daily Technical Forecast

Based on the early price action and the current price at 8521.75, the direction of the March E-mini NASDAQ-100 Index the rest of the session on Monday is likely to be determined by trader reaction to the 50% level at 8628.50.

Bullish Scenario

A sustained move over 8628.50 will indicate the presence of buyers. This could trigger a rally into a steep downtrending Gann angle at 8867.00. Taking out this angle will indicate the buying is getting stronger with the next upside objective 8944.75 to 9137.75.

Bearish Scenario

A sustained move under 8628.50 will signal the presence of sellers. This could trigger a steep break into the main Fibonacci level at 8360.75, followed closely by an uptrending Gann angle at 8310.00.

Taking out 8310.00 will indicate the selling pressure is getting stronger. This could lead to a test of last week’s low at 8126.25. If this price fails as support then look for the selling to extend into at least 7092.00.

This article was originally posted on FX Empire