The E-Mini NASDAQ 100 futures contract has endured a string of weakness in recent days, as price dropped nearly 200 points from the September high. However, this contract may be headed higher tomorrow. Here’s why..
Confluence of Support
The daily chart of the NQ shows price has responded to an area of the chart that offers an abundance of support for the month of September – 2,110 to 2,130. As a matter of fact, there is a confluence of pivot-based support in this zone, with the monthly Point of Control (POC) sitting at about 2,130 – red dotted line – and the monthly L3 Camarilla level sitting at around 2,124 – solid green line.
As you can see, buyers have stepped in each time this zone has been tested in September. In addition, a well-developed, upward-sloping channel has formed over the last two months. The lower boundary of the channel, which was tested Friday, coincides perfectly with pivot-based support. This three-way area of confluence could lead to another swift rally within the boundaries of the channel in the days ahead.
Narrow Value Area
The 15-minute chart shows price is coiling, as an Inside Value relationship pattern barely missed from forming by just a tick or two. However, despite not having a textbook Inside Value pattern, the NQ still looks poised for a big move.
As you may recall, an Inside Value formation develops when the upcoming Value Area is completely inside the prior day’s Value Area.
A narrow Value Area for the upcoming session has also developed, which forecasts breakout/trending price behavior for Monday’s market.
The Game Plan
If price opens the session above 2,190, look to buy anywhere between 2,185 and 2,210. Any weakness into this zone to begin the day should be seen as a buying opportunity.
There are two targets to watch for – the open gap at 2,246.50 and the naked POC at 2,302.50.
If price happens to gap down below 2,170, you might look to sell into strength between 2,185 and 2,205, with a target at Thursday’s low at 2,144.50.
“Great Course!”
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Let’s see how the NQ plays out tomorrow!
Cheers!
Frank Ochoa
PivotBoss.com
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