E-mini Dow Jones Industrial Average (YM) Futures Analysis Forecast – May Have to Test Value Area for Next Buy

December E-mini Dow Jones Industrial Average futures are trading lower late Monday as investors took profits after a sharp rally throughout the month of November.

Month-end rebalancing of portfolios played into Monday’s weakness, Reuters reported, as investors cashed in on gains after a strong month marked by updates of COVID-19 vaccines making headway and hopes of a swift economic rebound next year.

At 21:35 GMT, December E-mini Dow Jones Industrial Average futures are trading 29651, down 223 or -0.75%.

A rotation into energy, industrials and financials, all expected by many investors to outperform as the economy recovers from its downturn, have put the Dow Jones Industrial Average cash market on track for its biggest monthly gain since 1987.00.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on November 25 and its subsequent confirmation.

A trade through 30165 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend changes to down on a trade through 25953.

The short-term range is 25953 to 30165. Its retracement zone at 28059 to 27562 is the primary downside target.

Short-Term Outlook

The main trend is up, but momentum is down, which suggests traders may be looking for a break into a value area rather than buying strength at current price levels.

On the upside, 30165 is a potential trigger point for an acceleration to the upside, but the buying volume is going to have to be strong in order to produce this move.

The downside, a minor target comes in at 29116. This was the last low before the record high. Buyers may come in to defend this level, but if it fails prices could spike lower.

For a look at all of today’s economic events, check out our economic calendar.