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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – First Downside Target 8982.50 – 8910.75

March E-mini NASDAQ-100 Index futures closed lower on Friday after giving back earlier gains. The price action produced a closing price reversal top on the daily chart, which typically signals the start of a short-term correction. The early rally was fueled by strong gains for Intel. However, these gains were offset by concerns over the spreading of a coronavirus outbreak from China.

On Friday, March E-mini NASDAQ-100 Index futures settled at 9144.50, down 103.75 or -1.13%.

Daily March E-mini NASDAQ-100 Index
Daily March E-mini NASDAQ-100 Index

The index also posted a weekly closing price reversal top, which could lead to the start of a 2 to 3 week sell-off, or at least a 50% retracement of the last major rally.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum shifted to the downside on Friday. A trade through 9287.25 will signal a resumption of the uptrend. The main trend will change to down on a move through the last main bottom at 8678.00.

The minor trend is down. It turned down on Friday. This shifted momentum to the downside when sellers took out 9151.75. It was reaffirmed when 9114.75 failed to hold. The next minor bottom target is 9023.00.

The short-term range is 8678.00 to 9287.25. Its retracement zone at 8982.50 to 8910.75 is the first downside target.

The main range is 8189.25 to 9287.25. Its retracement zone at 8738.25 to 8608.75 is the primary downside target. It is also a value area.

Short-Term Outlook

If the downside momentum continues on Monday then look for the selling to extend into the uptrending Gann angle at 9030.00. This is followed by a minor bottom at 9023.00.

If 9023 fails then look for the selling to extend into the short-term 50% level at 8982.50. This is a potential trigger point for a further break into the short-term Fibonacci level at 8910.75, followed by an uptrending Gann angle at 8854.00.

On the upside, the first minor target is 9198.50. This is followed by 9287.25. Overcoming the uptrending Gann angle at 9309.25 will put the index in an extremely bullish position.

Side Notes

The daily/weekly closing price reversal top combination could be an extremely bearish trading signal especially since we’re in a news driven market. Look for heavy selling pressure to drive the index into 8982.50 to 8910.75 then 7838.25 to 8608.75.

Look out to the downside if 8608.75 is taken out by strong selling volume.

This article was originally posted on FX Empire

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