E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Key Support is Short-Term Pivot at 27886

E-mini Dow Jones Industrial Average futures are trading higher at the mid-session on Monday, but the trade has been pretty tame due to low volume ahead of the U.S. holiday on Thursday. The Dow is also lagging behind the benchmark S&P 500 Index and the technology-based NASDAQ Composite, which posted record highs earlier in the session.

At 17:40 GMT, December E-mini Dow Jones Industrial Average futures are at 27976, up 114 or +0.41%.

The catalyst behind Monday’s rally is increasing expectations that China and the U.S. will reach a so-called phase one trade deal. China said on Sunday that it will raise penalties for violating intellectual property rights, according to the guidelines added China will think about lowering punishment thresholds for IP theft.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The market has also clawed back more than 62% of last week’s two day sell-off that temporarily shifted momentum to the downside.

A trade through 28128 will signal a resumption of the uptrend. This will also turn 27643 into a new main bottom.

The minor trend is also up. A trade through 27643 will change the minor trend to down.

The first minor range is 28128 to 27643. Its 50% level or pivot at 27886 is providing support on Monday.

The second minor range is 27337 to 28128. Its 50% level or pivot at 27733 is additional support. The Dow straddled this level last week.

Daily Technical Forecast

Based on the early price action and the current price at 27976, the direction of the December E-mini Dow Jones Industrial Average into the close on Monday is likely to be determined by trader reaction to the first pivot at 27886.

Bullish Scenario

A sustained move over 27886 will indicate the presence of buyers. The first upside target is a downtrending Gann angle at 28000.

Taking out 28000 could trigger an acceleration to the upside into a cluster of Gann angles at 28064, 28071 and 28096. The latter is the last potential resistance angle before the 28128 main top.

Bearish Scenario

The inability to overcome 28000 will be the first sign of selling pressure. Taking out 27886 will indicate the selling pressure is getting stronger.

Crossing to the weak side of the downtrending Gann angle at 27872 could trigger an acceleration to the downside with 27733 the next likely downside target.