E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Needs to Build Support Base at 30563
March E-mini Dow Jones Industrial Average futures are trading higher shortly before the cash market close on Tuesday.
Several factors are behind the strong surge in prices including the easing of Wall Street’s fear gauge, the VIX, which retreated to near one-week lows as a retail-driven mania for shorted assets showed signs of fizzling out.
Gains in Amazon.com and Google-parent Alphabet ahead of their results and optimism over progress on a large fiscal pandemic relief package also underpinned stock prices. Meanwhile, adding to the upbeat mood, new cases of COVID-19 in the United States fell for a third week in a row, the first time since last September.
At 20:51 GMT, March E-mini Dow Jones Industrial Average futures are trading 30662, up 552 or +1.83%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart, but momentum shifted to the upside following the confirmation of yesterday’s closing price reversal bottom.
A trade through 31188 will change the main trend to up. The move through 29552 will negate the closing price reversal bottom and signal a resumption of the downtrend.
Shortly before the close, the Dow is trading on the strong side of a series of retracement levels at 30563, 30370, 30253 and 30032.
Trader reaction to 30563 will determine the short-term direction of the March Dow Jones Industrial Average futures contract.
A sustained move over 30563 will indicate the presence of buyers. If this move can generate enough upside momentum then look for a possible surge to the upside since the daily chart indicates no visible resistance until 31188.
A sustained move under 30563 will signal the presence of sellers. This could lead to a labored break with support a series of retracement levels at 30370, 30253 and 30032. These level should offer protection again a change in trend to down, which will occur if 29552 fails as support.
The trigger point for an acceleration to the downside is 29318. Taking out this main bottom could trigger an acceleration into the major retracement zone at 28530 to 27903.
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