E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Strong Rebound Makes 30474 New Support

March E-mini Dow Jones Industrial Average futures are trading slightly lower into the cash market close on Monday after recovering from a steep sell-off earlier in the session.

Helping to underpin prices early in the day were hopes officials in President Joe Biden’s administration could head off Republican concerns that his $1.9 trillion pandemic relief proposal was too expensive, even as lawmakers from both parties agreed that getting the COVID-19 vaccine to Americans should be a priority.

At 21:03 GMT, March E-mini Dow Jones Industrial Average futures are trading 30877, down 32 or -0.10%. This is up from an intraday low of 30457.

The intraday weakness in the Dow was fueled by the news that Merck & Co Inc would stop development of its two COVID-19 vaccines citing inferior immune responses. The Dow component drugmaker’s shares fell 1%.

Another Dow component, Microsoft, was up over 1.5% on Monday. The software giant is scheduled to report results on Tuesday. Meanwhile, Wedbush raised its price target on the software maker’s stock on expectations of further growth in its cloud business for 2021.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Monday when sellers took out the previous main bottom at 30506. The lack of follow-through to the downside, however, suggests the move was fueled by sell stops rather than aggressive sellers.

A late session trade through 30457 will signal a resumption of the downtrend. Taking out 31188 will change the main trend to up.

The minor range is 31188 to 30457. Its 50% level at 30823 is currently being straddled.

On the downside, a pair of 50% levels at 30474 and 30253 are support. The latter is a potential trigger point for an acceleration to the downside.

Short-Term Outlook

The direction of the March E-mini Dow Jones Industrial Average futures contract into the close on Monday will be determined by trader reaction to the pivot at 30823.

Bullish Scenario

A sustained move over 30823 will indicate the presence of buyers. This could trigger an acceleration to the upside with 31188 the next potential upside target.

Bearish Scenario

A sustained move under 30823 will signal the presence of sellers. If this move creates enough downside momentum then look for a retest of 30474 and 30253.

Side Notes

The E-mini Dow is being held up by 30253. If this level is taken out with strong downside volume then look for a potential acceleration to the downside with 29760 the next likely target.

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