December E-mini NASDAQ-100 Index futures plunged on Friday with the selling led by weakness in Netflix, Facebook, Amazon and Alphabet. Nonetheless, the index still managed to close higher for the week despite uncertainty over Brexit and U.S.-China trade relations.
Netflix shares dropped more than 6%. Facebook slid 2.2% while Amazon fell 1.6%. Alphabet shares pulled back 0.4%.
On Friday, December E-mini NASDAQ-100 Index futures settled at 7880.75, up 21.75 or +0.28%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed last week when buyers took out the 7973.75 swing top before running out of gas at 7994.75, slightly below the 8002.50 main top.
A trade through 7994.75 will signal a resumption of the uptrend. The main trend will change to down on a break through 7583.25.
The short-term range is 7583.25 to 7994.75. Its retracement zone at 7789.00 to 7740.50 is the first downside target. Since the main trend is up, buyers are likely to come in on the initial test of this area, so look for a technical bounce.
A failure to hold the short-term Fibonacci level at 7740.50 will indicate the selling is getting stronger. This is likely to lead to a test of the 50% level at 7696.25. If this level fails then look for the selling to possibly extend into the major retracement zone at 7623.50 to 7534.00.
Daily Swing Chart Technical Forecast
Friday’s price action and close at 7880.75 didn’t mean much to the chart structure, other than making 7994.75 a new minor top. If the selling pressure continues then look for a test of the short-term 50% level at 7789.00. Watch for buyers to step in on the first test of this level.
If 7789.00 fails then the selling is likely to extend into the short-term Fibonacci level at 7740.50. Once again buyers could step in on a test of this level. This breaking and buying pattern could continue on tests of 7696.25 and 7623.50, and all the way down to the main bottom at 7583.25. The trend will change to down if this bottom fails as support.
If there is no follow-through to the downside then the market is likely to resume its uptrend early next week. This will likely be fueled by a bullish outcome over Brexit this week-end.
Taking out 7994.75 will signal a resumption of the uptrend with the first target a main top at 8002.50, followed by the July 24 all-time high at 8071.75.
This article was originally posted on FX Empire
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