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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Will Traders Continue to Buy Strength, or Start Looking for Value?

James Hyerczyk

March E-mini NASDAQ-100 Index futures drifted higher in Tuesday’s holiday shortened session. Shortly after the opening, there was a minor setback but buyers were able to drive the market higher into the close.

The market remains in a position to challenge its record high reached the previous session. Traders said the catalysts behind the market’s strength are improving U.S.-China trade relations and lingering optimism about the health of the domestic economy.

On Tuesday, March E-mini NASDAQ-100 Index futures settled at 8729.50, up 3.00 or +0.03%.

Daily March E-mini NASDAQ-100 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 8743.25 will signal a resumption of the uptrend. The main trend will change to down on a move through the last main bottom at 8189.25. This is highly unlikely, however, there is room to the downside for a normal 50% to 61.8% correction.

The minor trend is also up. The minor trend will change to down when sellers take out the last minor bottom at 8319.50. This move will shift momentum to the downside.

Tuesday’s lower-high, lower-low chart pattern made 8743.25 a new minor top. This would be somewhat significant if it took place under normal trading conditions because it broke a nine-session pattern. The last minor swing down took place December 9 -10.

The minor range is 8319.50 to 8743.25. Its retracement zone at 8531.25 to 8481.25 is the first downside target.

The main range is 8189.25 to 8743.25. Its retracement zone at 8456.25 to 8400.25 represents value.

Another trend indicator to watch is the steep uptrending Gann angle moving up 32 points per day since the December 3 main bottom at 8189.25. This angle is currently at 8669.25. It has been guiding the market higher for 15 sessions.

It was penetrated on December 10 by 29.75 points. However, traders quickly recovered the angle and the rally continued for another nine sessions.

A move through the angle by more than 1 day or 29.75 points will indicate the selling is becoming greater than the buying, and this could lead to the start of a near-term correction.

Essentially, continuing to hold above the Gann angle while producing higher highs and higher lows will indicate the buying is still strong.

This article was originally posted on FX Empire