E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Needs to Hold 13804.75 to Sustain Upside Momentum

March E-mini NASDAQ-100 Index futures are trading lower after giving back earlier gains in the extended trading session Monday evening following a strong finish late last week. The U.S. stock market was closed on Monday for Presidents Day.

Strategists cited a fall in the CBOE Volatility Index, widely viewed as Wall Street’s best fear gauge, for the recent optimism in the markets.

“Fear is receding from the market,” Lee, a CNBC contributor, wrote of the move on Friday. “And receding fear is followed by systematic and quant funds adding ‘leverage’ – in other words, this is a set-up to see a rally.”

At 08:06 GMT, March E-mini NASDAQ-100 Index futures are trading 13867.50, down 4.50 or -0.03%. This is down from a high or 13900.50.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out the previous session high.

A trade through 12727.25 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, the index is vulnerable to a closing price reversal top. This chart pattern won’t change the trend to down, but it could trigger the start of a 2 to 3 day correction.

The minor trend is also up. A trade through 13516.75 will change the minor trend to down. This will also shift momentum to the downside.

Daily Swing Chart Technical Forecast

The direction of the March E-mini NASDAQ-100 index futures contract on Tuesday is likely to be determined by trader reaction to Friday’s close at 13804.75.

Bullish Scenario

A sustained move over 13804.75 will indicate the presence of buyers. Taking out the intraday high at 13900.50 will indicate the buying is getting stronger. The rest is up to momentum that could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 13804.75 will signal the presence of sellers. This could trigger a pullback into a pair of minor 50% levels at 13708.50 and 13622.75, followed by a minor bottom at 13516.75.

A close under 13804.75 will form a potentially bearish closing price reversal top. If this chart pattern is confirmed then look for the start of a 2 to 3 day correction.

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