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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Crossed to Weak Side of Long-Term Retracement Zone

James Hyerczyk

March E-mini NASDAQ-100 Index futures are trading sharply lower late Thursday as traders show little reaction to an intervention by the U.S. Federal Reserve. The move suggests that investors weren’t impressed by the number, or that it’s going to take a lot more than money to stop the selling pressure.

At 18:44 GMT, March E-mini NASDAQ-100 Index futures are at 7416.50, down 587.00 or -7.33%.

The price action suggests that investors don’t want to see money thrown at the market, they want to see a coordinated effort by the government and healthcare officials to stop the spread of coronavirus. No one knows at this time if it is going to take $500 billion or $1 trillion dollars to repair the damage to the economy.

Daily June E-mini NASDAQ-100 Index

Daily Technical Analysis

The main trend is down according to the Weekly swing chart. A trade through 9763.00 will change the main trend to up. This is highly unlikely, and at this point, it looks like a closing price reversal bottom is not likely also.

The main range is 6006.00 to 9763.00. Its retracement zone at 7884.50 to 7441.00 is currently being tested. This zone is controlling the longer-term direction of the index. Crossing to the weak side of this zone will put the index in a bearish position.

Short-Term Outlook

Based on the earlier price action and the current price at 7416.50, the direction of the March E-mini NASDAQ-100 Index into the close is likely to be determined by trader reaction to the main Fibonacci level at 7441.00.

Bearish Scenario

A sustained move under 7441.00 will indicate the selling is getting stronger. This could trigger a further break into the next uptrending Gann angle at 7014.00. If this angle fails then look for the selling to possibly extend into a pair of Gann angles at 6510.00 and 6258.00. The latter is the last potential support angle before the 6006.00 main bottom from December 24, 2018.

Bullish Scenario

Holding above the Fib level at 7441.00 will indicate the return of buyers. If they can create enough upside momentum then look for the rally to possibly extend into the 50% level at 7884.50, followed by a resistance cluster at 8022.00 to 8227.00.

Side Notes

Closing on the weak side of the retracement zone at 7441.25 to 7884.50 will put the index in a bearish position.

This article was originally posted on FX Empire