E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Stronger Over 30226, Weak Under 30005

March E-mini Dow Jones Industrial Average futures closed higher on Tuesday as investors recovered some of Monday’s loss by placing new bets for a strong global economic recovery.

Boeing was the best-performing stock in the Dow, gaining 4.4%. Energy stocks advanced 4.5% – their biggest one-day jump since December 4 – after Saudi Arabia agreed to voluntary production cuts in February and March. Chevron rose 2.7%. The news also sent U.S. West Texas Intermediate crude oil futures up 4.9% to briefly break above $50 per barrel for the first time since February.

On Tuesday, March E-mini Dow Jones Industrial Average futures settled at 30285, up 165 or +0.54%.

Bullish traders are now waiting for a “blue sweep” of Congress by the Democrats, whereby they control the House of Representatives and the Senate. This could pave the way for President-elect Joe Biden to push through his plans for tax reform, infrastructure spending and even larger fiscal stimulus.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 30691 will take out Monday’s closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 29318.

A move through 29760 will confirm the potentially bearish closing price reversal top. This will shift momentum to the downside and could trigger the start of a 2 to 3 day correction or even a change in trend.

The first minor range is 30691 to 29760. Its 50% level at 30226 is potential support.

The second minor range is 29318 to 30691. Its 50% level at 30005 is another potential support level. It was teste successfully on Tuesday.

The short-term range is 25872 to 30691. If the main trend changes to down, then its retracement zone at 28282 to 27713 will become the primary downside target.

Short-Term Outlook

Based on Tuesday’s close at 30285, the direction of the March E-mini Dow Jones Industrial Average futures contract on Wednesday is likely to be determined by trader reaction to 30226.

Bullish Scenario

A sustained move over 30226 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to challenge 30691. Taking out this level could trigger an acceleration to the upside especially if it’s a news driven move.

Bearish Scenario

A sustained move under 30226 will signal the presence of sellers. The first downside target is 30005. Taking out this level could lead to a test of Monday’s low at 29760. This will not only shift momentum to the downside, but it could trigger an acceleration into the main bottom at 29318.