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E-mini Dow Jones Industrial Average (YM) Futures Analysis – Recapturing 23313 Will Signal Return of Buyers

By:
James Hyerczyk
Published: Dec 20, 2018, 06:25 UTC

Since sellers have already produced a lower-low on the daily chart during this prolonged sell-off, the direction of the March E-mini Dow Jones Industrial Average futures contract the rest of the session is likely to  be determined by trader reaction to yesterday’s close at 23313.

E-mini Dow Jones Industrial Average

March E-mini Dow Jones Industrial Average futures tumbled on Wednesday in a volatile session after the Federal Reserve raised its benchmark overnight lending rate for the fourth time this year. It wasn’t the rate hike that spooked investors into selling, it was the less-dovish tone of the Fed’s monetary policy statement and its projection for as many as two interest rate hikes in 2019. Many investors thought the Fed would reduce the number of potential rate hikes to one, or take all off the board while remaining totally data dependent next year.

At 0555 GMT, March E-mini Dow Jones Industrial Average futures are trading 23154, down 159 or -0.68%.

E-mini Dow Jones Industrial Average
Daily March E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Due to the prolonged move down in terms of price and time, the best sign of a bottom is likely to be a closing price reversal bottom. The main trend will change to up on a trade through 24860.

Based on the earlier price action, the new short-term range is 24860 to 23057. Its retracement zone and first potential upside target is 23959 to 24171.

The new main range is 26110 to 23057. Its retracement zone and second potential upside target is 24584 to 24944.

The major downside target zone is 22151 to 21011.

Daily Swing Chart Technical Forecast

Since sellers have already produced a lower-low on the daily chart during this prolonged sell-off, the direction of the March E-mini Dow Jones Industrial Average futures contract the rest of the session is likely to  be determined by trader reaction to yesterday’s close at 23313.

Bullish Scenario

Overtaking and sustaining a rally over 23313 will indicate the return of buyers. This will put the market in a position to form a closing price reversal bottom. If this move creates enough upside momentum, we could see a potential surge into the short-term retracement zone at 23959 to 24171. Since the main trend is down, sellers could come in on the first test of this area.

Taking out 24171 will indicate the buying is getting stronger with the next potential targets a 50% level at 24584, a main top at 24860 and a 61.8% level at 24944.

Bearish Scenario

A sustained move under 23313 will signal the presence of sellers. Taking out the current intraday low at 23057 will indicate the selling is getting stronger.

The daily chart is wide open to the downside under 23057 with the next potential support target the long-term 50% level at 22151.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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