E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Shift in Momentum Could Lead to Test of 28218

Profit-takers ran the show on Monday as March E-mini Dow Jones Industrial Average futures fell from their all-time highs reached last week. The Dow was on pace for its worst trading session in four weeks. Analysts said the best-performing fourth quarter sectors led the market lower, which implies some short-selling and year-end position-squaring.

At 21:04 GMT, March E-mini Dow Jones Industrial Average futures are trading 28455, down 155 or -0.54%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 28721 will signal a resumption of the uptrend. The main trend will actually turn down on a move through 27297.

Monday’s lower-high, lower-low made 28721 a new minor top. The nearest minor bottom is 27715.

The minor range is 27715 to 28721. Its retracement zone at 28218 to 28099 is the first potential downside target.

The main range is 27297 to 28721. Its retracement zone at 28009 to 27841 is the second downside target. This is also a value zone. Since the main trend is up, buyers are likely to come in on a test of this area.

Short-Term Outlook

On Monday, March E-mini Dow Jones industrial Average futures crossed to the weak side of a pair of uptrending Gann angles at 28547 and 28449. Since these angles have been guiding the market higher since early December, breaking these angles may be indicating a significant shift in momentum.

Crossing over to the strong side of the angles will put the Dow in a position to challenge the all-time high at 28721.

If sellers continue to pound the futures contract through the angles then look for a potential acceleration to the downside with the first target a minor 50% level at 28218.

If 28218 fails as support then look for the selling to possibly extend into another uptrending Gann angle at 28131 and the minor Fibonacci level at 28099.

Since the main trend is up and investors are looking for value, look for buyers to show up on a test of the retracement zone targets.