NQ opened with a big gap-down on Monday then traded sideways in a choppy pattern all day on Monday, closing at just below the key 50-ma (7400) on the 5-minute chart.
7400 will then serve as key inflection price level for Tuesday.
-- Trading above 7400 on Tuesday morning is an indication NQ wants to rally back up to the balance price level, the 200-ma on the 5-minute chart. As of the close on Monday, the 200-ma on the 5-minute chart was at 7505, which should act as strong resistance on Tuesday.
-- If the open is below 7400 price level on Tuesday we could see heavy selling, with the first downside target is a break below Monday swing low. Once the break below Monday low occurs, we could see either an acceleration to the downside with lower target down to 7000 to 7100 zone, or a fast reversal UP in case of false-break down.
Falsebreak Reversal Pattern (New Low below = Monday Swing Low)
