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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Next Downside Target 9664.00, Followed by 9501.25

James Hyerczyk

June E-mini NASDAQ-100 Index futures are down sharply at the mid-session as investors book profits after a week where the technology index posted record highs the three straight days, closing above 10,000 for the first time. The selling is being fueled by fears over a second-wave of coronavirus cases and a Federal Reserve that painted a bleak outlook for the economy on Wednesday afternoon.

The selling isn’t limited to the cash market NASDAQ Composite either. The blue chip Dow Jones Industrial Average traded 1,300 points lower, or 4.8% and the benchmark S&P 500 Index dropped 3.2%.

At 16:31 GMT, June E-mini NASDAQ-100 Index futures are trading 9794.00, down 293.25 or -2.91%.

In the technology sector, Netflix and Zoom Video – two stocks that have benefited from consumers staying at home during the pandemic – rose 1.8% and 3.4%, respectively, clawing back earlier losses. Stocks that were expected to benefit from the re-opening of the economy like United Airlines and Delta fell nearly 10%.

The big concern for investors is that despite all the monetary stimulus from the Federal Reserve, they do not have any weapons to fight a second wave of coronavirus cases.

Daily June E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 10155.50 will signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at 8847.00.

The minor trend is also up. A trade through 9572.25 will change the minor trend to down. This will also shift momentum to the downside. Thursday’s price action turned 10155.50 into a new minor top.

The first minor range is 9572.25 to 10155.50. Its 50% level at 9863.50 could act like a pivot later in the session.

The second minor range is 9172.50 to 10155.50. Its 50% level at 9664.00 is the next downside target.

The main range is 8847.00 to 10155.50. Its retracement zone at 9501.25 to 9346.75 is the main target of this current break.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 9794.00, the direction of the June E-mini NASDAQ-100 Index the rest of the session on Thursday is likely to be determined by trader reaction to 9863.50.

Bearish Scenario

A sustained move under 9863.50 will indicate the presence of sellers. If this creates enough downside pressure then look for a move into the next 50% level at 9664.00.

A failure to hold 9664.00 could trigger a further break into the retracement zone at 9501.25 to 9346.75.

Bullish Scenario

A sustained move over 9863.75 will signal the return of buyers. This could trigger a late session short-covering rally into 9958.25, followed by 10155.50.

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

This article was originally posted on FX Empire