nasdaq 100 futures technical analysis
Technical Analysis

NASDAQ 100 technical analysis – January 21, 2025

Introduction

The NASDAQ 100 E-mini Futures (NQ) are trading at 21,703.75, continuing their upward trajectory following the recent inauguration of President Trump. Traders and investors are pricing in optimism on pro-growth economic policies, contributing to the strength in equities.


Nasdaq 100 technical analysis futures

Technical Analysis Overview

Trend and Structure:

  • NQ remains in a well-established uptrend, consistently making higher highs and higher lows, supported by the 50-day SMA (21,332.37) and the 200-day SMA (19,840.12).
  • Recent price action shows a bounce off the 50-day SMA, confirming it as dynamic support and reinforcing bullish momentum.

Support and Resistance Levels

Resistance Levels:

  1. 21,800 – 22,000: Immediate resistance zone, aligning with previous swing highs. A break above this level could trigger a continuation toward new all-time highs.
  2. 22,500: Psychological resistance level and a potential next target if bullish momentum persists.

Support Levels:

  1. 21,332 (50-day SMA): Immediate support, which has acted as a launchpad for recent moves higher.
  2. 20,800: A strong horizontal support zone and the recent local low.
  3. 19,840 (200-day SMA): A critical longer-term support level, maintaining the structural uptrend.

Indicators Analysis

MACD (Moving Average Convergence Divergence):

  • The MACD line is at 7.47, above the signal line at 4.11, and bullish momentum is gaining strength.
  • The histogram has turned positive, so there is potential for further upside if momentum sustains.
  • A bullish crossover occurred recently, reinforcing the case for continuation higher.

Moving Averages:

  • The 50-day SMA (21,332) is trending upward, confirming short-term bullish momentum.
  • The 200-day SMA (19,840) remains supportive of the broader bullish trend, indicating strong long-term support.

Scenarios to Watch

Bullish Case:

  • A sustained move above 21,800 would confirm the continuation of the uptrend, targeting the 22,000 – 22,500 zone.
  • Positive sentiment surrounding economic policies and fiscal stimulus could further fuel buying interest, pushing NQ into price discovery mode.

Bearish Case:

  • A failure to hold above the 50-day SMA (21,332) could lead to a pullback toward the 20,800 support zone, with further downside risk to the 200-day SMA at 19,840 if selling accelerates.
  • Any unexpected economic data or policy shifts could create volatility and stall the current bullish momentum.

Trade Ideas

Bullish Setup:

  • Entry: Long positions above 21,800, targeting a breakout continuation.
  • Targets:
    • First target: 22,000.
    • Second target: 22,500 (ATH).
  • Stop-Loss: Below 21,500 to minimize risk.

Bearish Setup:

  • Entry: Short positions on a rejection from 21,800, targeting a retracement to key support levels.
  • Targets:
    • First target: 21,332 (50-day SMA).
    • Second target: 20,800.
  • Stop-Loss: Above 21,900 to manage risk.