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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Close Under 8465.25 Forms Potentially Bearish Closing Price Reversal Top

James Hyerczyk

December E-mini NASDAQ-100 Index futures are edging higher at the mid-session. The market is being supported by the announcement that China and the U.S. had agreed to a phase-one trade deal. Friday’s session has been filled with choppy, two-sided trading over the lack of clarity from both the United States and China.

China agreed to a significant purchase of U.S. agricultural products, but failed to give a specific amount, disappointing some investors who expected a firmer commitment. On the U.S. side, investors were hoping for more than just a partial rollback of some tariffs.

At 17:31 GMT, December E-mini NASDAQ-100 Index futures are trading 8495.75, up 30.50 or +0.36%.

Daily December E-mini NASDAQ-100 Index
Daily December E-mini NASDAQ-100 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session. A trade through the intraday high at 8523.75 will signal a resumption of the uptrend.

The main trend will change to down on a trade through 8168.25. This is highly unlikely, but the index is inside the window of time for a closing price reversal top.

A close below 8465.25 will form a closing price reversal top. This chart pattern won’t indicate a change in trend, but it will indicate the selling is greater than the buying at current price levels. If confirmed on Monday, it could lead to a two to three day correction.

The minor trend is also up. A trade through 8297.00 will change the minor trend to down. This will also shift momentum to the downside.

Daily Technical Forecast

Based on the early price action and the current price at 8495.75, the direction of the December E-mini NASDAQ-100 Index into the close on Friday is likely to be determined by trader reaction to 8465.25.

Bullish Scenario

A sustained move over 8465.25 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of the intraday high at 8523.75. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 8465.25 will put the index in a position to form a potentially bearish closing price reversal top. This could trigger a further decline into an uptrending Gann angle at 8424.25.

If 8424.25 fails as support then look for a potential acceleration to the downside with the next target angle coming in at 8296.25. Additional Gann angle support comes in at 8783.25 and 8274.25.

This article was originally posted on FX Empire