E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Testing 23796 – 25144 Retracement Zone

June E-mini Dow Jones Industrial Average futures finished lower on Thursday, but still managed to post tremendous gains for the month. The primary catalysts behind the rally were expectations the economy will soon start recovering from crushing restrictions enacted to curb the coronavirus pandemic.

While risk-off selling pulled all three major U.S. stock averages into the red, the Dow posted their largest monthly percentage gains since January 1987. The blue chip average is now well within 20% of record highs reached in February, having quickly rebounded since shutdown efforts to curb the spread of the coronavirus pandemic brought the economy to a grinding halt.

On Thursday, June E-mini Dow Jones Industrial Average futures settled at 24230, down 336 or -1.39%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum shifted to the downside with the formation of a closing price reversal top on Thursday. This chart pattern won’t change the trend to down, but it could trigger the start of a 2 to 3 day correction.

A trade through 24792 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at 22914.

The main range is 29506 to 18086. Its retracement zone at 23796 to 25144 is controlling the longer-term direction of the market. The Dow closed inside this zone on Thursday.

The intermediate range is 26962 to 18086. Its retracement zone at 23571 to 22524 is another support zone.

The best support is a price cluster at 23796 to 23571.

Daily Swing Chart Technical Forecast

Based on Thursday’s chart pattern and the close at 24230, the direction of the June E-mini Dow Jones Industrial Average on Friday is likely to be determined by trader reaction to yesterday’s low at 24072.

Bearish Scenario

Taking out 24072 will confirm the closing price reversal top. The first downside targets are 23796 and 23571. The latter is a potential trigger point for an acceleration to the downside with the next targets the main bottom at 22914 and the 50% level at 22524.

Bullish Scenario

A sustained move over 24072 will signal the presence of buyers. If this is able to generate enough upside momentum then look for a possible retest of 24792, followed by the main Fibonacci level at 25144.