E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 29164 Pivot Sets the Tone

December E-mini Dow Jones Industrial Average futures are trading higher late in the session on Tuesday after clawing back earlier weakness. Although some traders have pulled out money following yesterday’s euphoric rally, others bought the dip in anticipation of more upside action.

The price action indicates that investors are rotating out of high-flying technology-related stocks that populate the NASDAQ Composite Index into cyclical stocks in the Dow that will benefit from a reopening of the economy if the news about a successful late-stage COVID-19 vaccine trial proves to be true.

At 20:06 GMT, December E-mini Dow Jones Industrial Average futures are at 29301, up 253 or +0.87%.

The Dow is being underpinned by a 4% jump for Amgen Inc after its asthma drug, being developed in collaboration with AstraZeneca, met the main goal of a late-stage study.

In other news, Dow component Apple, is expected to unveil new Mac computers using its own in-house processor chips.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 30000 will signal a resumption of the uptrend. The main trend will change to down on a move through 25953. This is highly unlikely but there is room for a normal 50% to 61.8% correction.

The minor range is 28328 to 30000. Its 50% level at 29164 is acting like a pivot.

The short-term range is 25953 to 30000. Its retracement zone at 27977 to 27499 is the first downside target and potential support.

The major support zone is 27189 to 26525.

Short-Term Outlook

Based on the late session price action, the direction of the December E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the pivot at 29164.

Bullish Scenario

A sustained move over 29164 will indicate the presence of buyers. If this move is able to create enough upside momentum then look for a retest of the all-time high at 30000.

Bearish Scenario

A sustained move under 29164 will signal the return of sellers. This won’t change the trend to down, but it will indicate that investors may be looking for value. If that’s the case then look for the selling to possibly drive the market into 27977 to 27499. Since the main trend is up, buyers are likely to come in on a test of this area.