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James Hyerczyk
E-mini Dow Jones Industrial Average

June E-mini Dow Jones Industrial Average futures are trading higher at the mid-session on Thursday, boosted by gains in healthcare and technology stocks, as investors hoped for a swift economic recovery from a coronavirus-driven economic slump.

Boeing Co. climbed 3.3%, the most among the 30 blue-chip Dow components, as the planemaker said it had resumed production of its 737 MAX passenger jet at its Washington plant, although at a “low rate”.

At 16:42 GMT, June E-mini Dow Jones Industrial Average futures are trading 25684, up 150 or +0.59%.

Although the Dow is testing levels not reached since March 6, the buying has been tentative on Thursday. Worsening ties between Washington and Beijing over the handling of the coronavirus outbreak and a new national security law in Hong Kong pose a major threat to the stock market’s strong recovery from the crash earlier this year.

President Donald Trump has promised action over Hong Kong by the end of the week.

In other news, the number of Americans filing for unemployment benefits held above 2 million for a 10th straight week, while a separate report showed GDP contracted at a bigger-than-expected 5% annualized rate in the first quarter, the deepest drop in output since the 2007-09 Great Recession.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out yesterday’s high. The next objective is the March 3 main top at 26962. A trade through 22704 will change the main trend to down.

The minor trend is also up. A move through 24076 will change the minor trend to down. This will shift momentum to the downside.

The main range is 29506 to 18086. Its retracement zone at 25144 to 23796 is controlling the longer-term direction of the Dow. The nearest support is the main Fibonacci level at 25144.


Daily Swing Chart Technical Forecast

Look for the upside bias to continue as long as the June E-mini Dow Jones Industrial Average remains above 25144. If this is able to generate enough upside momentum then look for the rally to possibly extend into 26962.

A failure to hold 25144 should result in the loss of upside momentum. This could trigger a near-term correction into a minor pivot at 24935. Since the main trend is up, buyers are likely to come in on a test of this level. If it fails then look for the selling to possibly extend into a cluster of potential support levels at 24076, 23796 and 23571.

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