Advertisement
Advertisement

E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Rally May Have Stalled at 30738

By:
James Hyerczyk
Published: Feb 4, 2021, 05:40 UTC

The early price action suggests the direction of the market on Thursday is likely to be determined by trader reaction to 30563.

E-mini Dow Jones Industrial Average

In this article:

March E-mini Dow Jones Industrial Average futures are inching lower on Thursday after posting a small gain the previous session. Although Wednesday’s rally extended the winning streak to three sessions, traders failed to take out Tuesday’s high. This could be an early sign that the buying is slowing or the selling is increasing.

At 05:21 GMT, March E-mini Dow Jones Industrial Average futures are trading 30565, down 62 or -0.20%.

Traders may have been influenced by activity in Washington, where U.S. President Joe Biden was scheduled to meet with congressional Democrats preparing to advance his $1.9 trillion COVID-19 relief plan despite Republican pushback. Biden told congressional Democrats he would not back down on including $1,400 checks for struggling Americans in his COVID-19 relief plan but would consider tighter limits on who gets them, lawmakers and aides said.

Earnings season continued on Wednesday where U.S. companies are on track to post earnings growth for the fourth quarter of 2020, data from Refinitiv showed on Wednesday, which would defy expectations for profits to drop 10% due to the pandemic. Based on results from 223 companies and estimates for the rest, S&P 500 earnings are expected to have risen 0.9% in the fourth quarter of 2020 from a year ago.

Daily March E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since Monday’s closing price reversal bottom.

The main trend will change to up on a move through 31188. A move through 29552 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The short-term range is 31188 to 29552. Its retracement zone at 30563 to 30370 is currently being tested. This is potential support.

The intermediate range is 29318 to 31188. Its retracement zone at 30253 to 30032 is a potential support area.

The main range is 25872 to 31188. If the downtrend resumes then its retracement zone at 28530 to 27903 will become the primary downside target zone.

Short-Term Outlook

The early price action suggests the direction of the market on Thursday is likely to be determined by trader reaction to 30563.

Bearish Scenario

A sustained move under 30563 will indicate the presence of sellers. This could lead to a labored break with potential downside targets lined up at 30370, 30253 and 30032. The latter is a potential trigger point for an acceleration into 29552 to 29318.

Bullish Scenario

A sustained move over 30563 will signal the presence of buyers. Taking out this week’s high at 30738 could trigger an acceleration to the upside with 31188 the next potential upside target.

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

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.

Did you find this article useful?

Advertisement