E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Strong Over 30715, Weak Under 30569

March E-mini Dow Jones Industrial Average futures are trading sharply higher at the mid-session on Thursday as investors looked past data which showed another sharp contraction in the U.S. economy. An intraday reversal of declines in several technology-heavyweights also helped boost prices. These mega-cap heavyweights included Microsoft Corp, a major Dow Component.

At 17:34 GMT, March E-mini Dow Jones Industrial Average futures are at 30817, up 628 or +2.08%.

Data showed the U.S. economy contracted at its sharpest pace since World War Two in 2020 as COVID-19 ravaged services businesses such as restaurants and airlines.

A separate report showed 847,000 more people likely filed jobless claims last week, strengthening views of a persistent labor market weakness.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, the early price action suggests momentum may be getting ready to shift to the upside.

A trade through 29950 will signal a resumption of the downtrend. A move through 31188 will change the main trend to up.

The short-term range is 29318 to 31188. Its retracement zone at 30253 to 30032 was tested successfully earlier in the session although the actual low came in slightly below at 29950.

The minor range is 31188 to 29950. The market is currently straddling its retracement zone at 30569 to 30715. Trader reaction to this area could determine the near-term direction of the market.

Aggressive counter-trend buyers are going to try to overcome this zone in an effort to challenge the record high at 31188. Trend traders are going to try to stop the rally in an effort to form a potentially bearish secondary lower top.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the E-mini Dow into the close will be determined by trader reaction to 30715.

Bullish Scenario

A sustained move over 30715 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into 31188 over the near-term.

Bearish Scenario

A sustained move under 30715 will signal the presence of sellers. The first target is 30569. This is followed by a minor pivot at 30394. If this level fails then look for retest of the retracement zone at 30253 to 30032.