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Futures: NASDAQ futures near resistance PDF Print E-mail
Written by Our Staff Writer   

July 17, 2009: The Nasdaq futures (Symbol: NQ) are reaching a key resistance in the grandest of timeframes--the monthly chart.

NQ is reaching a former area of support, which can now act as resistance. Please check the blue box in the chart below to see the area of resistance. NQ found support in that area four times between 2004 and 2008. The first time the area provided support was in August 2004, the second time in April 2005, the third time in July 2006 and finally in March 2008.The support areas are marked by the white horizontal lines on the chart with the dates at the base of the lines

Usually previous areas of support turn to resistance when prices break below it and then rally back up.  That's the case with NQ now.

The area of resistance is further validated in price and time by key Fibonacci numbers. Notice that the blue box marking the resistance is between the 50% and 61.8% Fibonacci retracement areas. The Fibonacci lines are drawn from when NQ was at 2068 to most recent bottom of 1039. We chose this range as it is a fall with no major corrections.

We also drew Fibonacci time extension lines from the same areas and the key turning points are shown by the blue vertical lines. Notice that the prices turned in time to rally at the 61.8% and NQ now is at 161.8%, both of which are important Fibonacci numbers.

Prices may continue to rally to the resistance area in price marked by the blue box and turn possibly in the next couple of weeks. Since the NASDAQ has been the leading the market up, a turn in the tech-heavy index can reverse the rally of the broad market.  

Caveats

If the other markets such as the S&P 500, Russell 2000 and Dow continue to rally, NQ may continue to move up.

Chart Analysis

NASDAQ futures near resistance