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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trend Turned Down, Headed into 10917.50 or Lower

James Hyerczyk
·2-min read

A surge in coronavirus cases in the United States and Europe is spooking investors to aggressively dump technology and technology-related shares, driving the September E-mini NASDAQ-100 Index sharply lower on Wednesday.

The spiraling pandemic and a failure to reach a deal on a fresh round of U.S. fiscal stimulus before the November 3 election as well as uncertainty over the results of the presidential election are encouraging investors to seek protection in safe-haven assets.

At 20:07 GMT, December E-mini NASDAQ-100 Index futures are trading 11147.00, down 441.00 or -3.81%.

Losses were broad-based with technology stocks weighing the most. The Big Tech companies – Apple, Alphabet, Amazon and Facebook – which are due to report results on Thursday, fell between 2.8% and 4.8%, weighing the most on the tech-based index.

Microsoft Corp’s quarterly results surpassed analysts targets, benefiting from a pandemic-driven shift to working from home and online learning. Its shares, however, fell about 4% after rising 35% so far this year.

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

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Wednesday when sellers took out the last swing bottom at 11197.50. The trend will change to up on a move through 12249.00.

The market just shredded short-term retracement levels at 11265.00, 11452.75, 11550.75 and 11761.75. They have become potential resistance levels.

The first main range is 9390.50 to 12444.75. Its retracement zone at 10917.50 to 10557.25 is the primary downside target. This zone stopped the selling last month at 10660.25 and 10989.00. This zone is also controlling the near-term direction of the index. If it fails to hold as support then look for the selling to continue.

Short-Term Outlook

Trader reaction to 10917.50 to 10557.25 will set the zone of the index the rest of the week. We could see a technical bounce on the first test of 10917.50, but if it fails then it only makes sense that sellers will try to take out the support cluster at 10660.25 to 10557.25. The latter is a potential trigger point for an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire