Tech stocks are lifting the December E-mini NASDAQ-100 Index into the close on Thursday, suggesting a short-term bottom may be forming. Technically, the “W” formation is encouraging for bullish traders.
The tech-driven index is being supported as beaten-down shares gained favor after data showing a surge in the sale of new homes revived faith in the economic recovery even as U.S. jobless claims rose unexpectedly.
At 20:17 GMT, December E-mini NASDAQ-100 Index futures are trading 10893.25, up 64.25 or +0.59%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 10656.50 will signal a resumption of the downtrend. A move through 11222.00 will change the main trend to up.
The main range is 9390.50 to 12444.75. The index is currently testing its retracement zone at 10917.50 to 10557.22. Trader reaction to this zone could determine the near-term direction of the index.
The minor range is 11539.00 to 10656.50. Its retracement zone at 11094.75 to 11199.75 is the next upside target. A trade through this zone could trigger an acceleration to the upside.
Although the December E-mini NASDAQ-100 Index did not form a closing price reversal bottom on Thursday, the price action was impressive enough to suggest a shift in momentum may be taking place. Currently, the market is in a position to close higher for the session, but it still has to overcome a number of retracement levels at 10917.75, 11094.75 and 11199.75 before challenging the main top at 11222.00.
The fact that buyers are trying to form a support base indicates the importance of the retracement zone at 10917.75 to 10557.25. Keep this in mind if seller eventually take out the bottom of this zone. It could trigger the start of a steep break.
So let’s just say the price action is impressive and could be the start of a support base and a potential change in trend over the short-run. However, keep in mind that the trend is still down and the index is vulnerable to an extreme breakdown under 10557.25.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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