E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Strong Over 34655, Weak Under 34431
December E-mini Dow Jones Industrial Average futures are edging lower in the pre-market session on Friday, one day after posting a more than 1% gain. The price action suggests the move was fueled by value-seeking buyers who may have been expressing relief about the Federal Reserve’s stance on tapering stimulus and raising interest rates.
At 05:35 GMT, December E-mini Dow Jones Industrial Average futures are trading 34621, down 23 or -0.07%.
Investors also returned to the market as concerns eased further over a potential default by Chinese property developer Evergrande even as Reuters reported that some holders of the firm’s dollar bonds had given up hope of getting a coupon payment by a key Thursday deadline.
In stock related news, shares of IT services provider Salesforce finished up 7.21% and the company was a big boost to the Dow during the session after it raised its annual earnings forecast.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 33478 will signal a resumption of the downtrend. A move through 35383 will change the main trend to up.
The minor trend is also down. A trade through 34826 will change the minor trend to up. This will shift momentum to the upside.
The main range is 32835 to 35429. Its retracement zone at 34132 to 33826 is a potential support area.
The short-term range is 35383 to 33478. The market is currently testing its retracement zone at 34431 to 34655. Trader reaction to this zone will determined the near-term direction of the E-mini Dow.
Daily Swing Chart Technical Forecast
The direction of the December E-mini Dow Jones Industrial Average on Friday is likely to be determined by trader reaction to 34655.
A sustained move over 34655 will indicate the presence of buyers. Taking out the minor top at 34826 will change the minor trend to up and shift momentum to the upside. This could extend the rally into a pair of minor tops at 34907 and 35076. The latter is the last potential resistance before the main top at 35383 and the record high at 35429.
A sustained move under 34655 will signal the presence of sellers. This could trigger a break into the 50% level at 34431.
We could see a technical bounce on the first test of 34431, but if it fails then we could see a retest of the main retracement zone at 34132 to 33826.