The E-Mini NASDAQ sees modest expansion from narrow range, but more upside could still be seen to 4300.
Sellers Provide Early Fuel
A week ago I wrote the following regarding a potential short squeeze in the E-Mini NASDAQ 100 futures [CME: NQZ14]: “Bears have defended the previous week’s high price (4179.75) for six straight sessions now, which helps to identify the key battle line between bulls and bears at the moment. Additionally, this lets you know that there are plenty of buy stops that are growing above recent highs which, if triggered, could lead to one heck of a short squeeze to higher highs.”
Those sellers did indeed get squeezed above the 4179.75 key level, which has provided the early fuel for expansion from the super narrow range that had developed from 4119.75 to 4179.75. While the move hasn’t had the momentum that I was expecting, more upside follow-through could still be ahead.
4179.75 Remains the Pivot to Watch
NQ bulls remain firmly in control after successfully squeezing shorts through the 4179.75 key level, which remains the key pivot to watch. Price is currently holding above this level and is attempting to establish acceptance above it, which would suggest a continuation toward the primary weekly bull target at 4292, with 4300 just above.
Additionally, buyers defended the morning pullback to the weekly pivot range Monday, and successfully closed price back above it, which further implies strength to new highs, as prices have been bid at the weekly pivot range in recent weeks. Expect bulls to continue to defend pullbacks to 4179.75 for a shot at new highs.
Narrow 3-Day Range
The recent 3-day range in the NQ is just 35.50 points, which is 63% of its average 3-day range of 56.25. As I’ve mentioned before, anytime price trades in a range that is less than 65% of its average range, the probability for expansion increases. The key range to watch is 4191.50 to 4227, with a midpoint at 4209.25. Above 4227 likely squeezes shorts into the primary weekly bull target at 4292, with a shot at prices beyond 4300.
Bears want to defend 4230 for a shot at running downside sell stops through 4179.75 and into the primary weekly bear target at 4123.75. As always, short term selling pressure within a bullish trend offers buying opportunities for fresh highs down the road. Look for bulls to defend any probe into 4119.75 for another round of strength.
Cheers!
Frank Ochoa
Author, Secrets of a Pivot Boss
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