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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Big Test for Bulls at 10917.50 – 10557.25

James Hyerczyk
·3 minuto per la lettura

December E-mini NASDAQ-100 Index futures are down sharply at the mid-session on Friday with the sell-off being fueled by disappointing earnings reports from several tech-heavyweights. Helping to cap gains at the start of the session and basically all week are the record rise in coronavirus cases and general uncertainty ahead of the U.S. presidential election on Tuesday.

At 15:55 GMT, December E-mini NASDAQ-100 Index futures are trading 11002.50, down 242.25 or -2.15%.

The tech-driven index is on course to post its worst week since March as spiraling coronavirus cases in the United States push hospitals to the brink of capacity.

Component Apple Inc tumbled about 5.2% after it posted the steepest drop in quarterly iPhone sales in two years due to the late launch of new 5G phones.

Another tech-giant, fell 4.1% after it forecast a jump in costs related to COVID-19, while Facebook Inc shed 6.2% as it warned of a tougher 2021.

The Communications Services Sector got a boost from a 3.9% jump in shares of Alphabet Inc after the Google parent beat estimates for quarterly sales as business resumed advertising.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The new swing bottom targets come in at 10989.00 to 10660.25.

The main trend will change to up on a trade through the nearest main top at 12249.00. That’s not likely to happen, but the index is down 13 sessions from the last main top, which puts it inside the window of time for a closing price reversal bottom. This chart pattern won’t change the trend to up, but it could trigger the start of a 2 to 3 day counter-trend rally.

The minor trend is also down. A trade through 12022.00 will change the minor trend to up. This will shift momentum to the upside.

The current main range is 9390.50 to 12444.75. Its retracement zone at 10917.50 to 10557.25 is the primary downside target. It stopped the selling on September 24 and September 21 so we could see buyers on a test of this area.

On the upside, the first resistance area is 11265.00 to 11452.75, followed by 11550.75 to 11761.75.

Short-Term Outlook

The intraday selling pressure looks stronger enough to drive the index into 10917.50 to 10557.25. Inside this zone is a main bottom at 10660.25. Watch for counter-trend buyers on a test of this zone.

Trade the trend, but make sure you have trailing stops. The market could turn quickly on a test of this area. Watch for intraday “W” patterns on the 15 and 60 minute charts or a closing price reversal bottom on a test of this area. They will indicate the selling has stopped, or new buyers are coming in.

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

This article was originally posted on FX Empire