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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Low Volume May Lead to Failed Upside Breakout Over 8724.75

James Hyerczyk

March E-mini NASDAQ-100 Index futures notched a new record high on Monday with the market getting a boost from strong economic growth and positive comments from President Trump regarding the U.S.-China trade deal.

Consumer spending growth for the third quarter was revised higher to 3.2% from 2.9%. Additionally, sentiment among consumers also remained strong in December.

Meanwhile, prices were also underpinned after President Trump tweeted he had a “very good talk” with Chinese President Xi Jinping about the U.S.-China trade deal, noting “China has already started large scale purchases of agricultural product & more.”

After Monday’s U.S. Durable Goods report is released at 13:30 GMT on Monday, expect a steep drop-off in trading volume as investors take to the sidelines ahead of the Christmas holiday on Wednesday.

On Friday, March E-mini NASDAQ-100 Index futures settled at 8710.25, up 37.25 or +0.43%.

Daily March E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 8724.75 will signal a resumption of the uptrend. The main trend will change to down on a trade through 8189.25. This is highly unlikely, however.

Instead of looking for a change in trend, traders should be watching for a potentially bearish closing price reversal top. This chart pattern will not mean the trend is changing, but it could lead to the start of a 2 to 3 day counter-trend break.

The minor range is 8319.50 to 8724.75. Its retracement zone at 8522.00 to 8474.25 is the first potential downside target.

The intermediate range is 8189.25 to 8724.75. Its retracement zone at 8457.00 to 8393.75 is the second potential downside target.

The main range is 7833.00 to 8724.75. Its retracement zone at 8278.75 to 8173.75 is the best downside target. It’s also a value zone.

Daily Swing Chart Technical Forecast

Based on Friday’s close at 8710.25 and last week’s price behavior, the direction of the March E-mini NASDAQ-100 Index on Monday is likely to be determined by trader reaction to 8724.75.

Bullish Scenario

A sustained move over 8724.75 will indicate the presence of buyers.

Bearish Scenario

The inability to overcome 8724.75 will signal the presence of sellers, or the lack of buyers. Taking out Friday’s low at 8665.25 will indicate the selling is getting stronger. If this is able to create enough downside momentum then look for a correction into 8522.00 to 8474.25 over the near-term.

Closing Price Reversal Top

Taking out 8724.75 then closing lower for the session will form a closing price reversal top. If confirmed, this won’t change the trend, but it could lead to a 2 to 3 day correction.

This article was originally posted on FX Empire