E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trying to Form Reversal Bottom

June E-mini Dow Jones Industrial Average futures are trading higher on Tuesday as we approach the mid-session. After dipping more than 200 points earlier in the session, the market turned around on reports of progress on a possible treatment for the coronavirus and more monetary stimulus from the U.S. Federal Reserve.

At 15:30 GMT, June E-mini Dow Jones Industrial Average futures are at 20604, up 343 or +1.69%.

Biotech giant Regeneron said Tuesday morning that it’s aiming to have doses of a potential drug for COVID-19 ready to start human clinical trials by early summer. The announcement, which represents a marked acceleration in the company’s drug timeline, sparked a 9% rally in the company’s equity.

Meanwhile, the Fed announced measures to help companies struggling to get short-term funding amid the outbreak.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, today’s price action has put the Dow in a position to post a potentially bullish closing price reversal bottom. This won’t change the trend to up, but if confirmed, it could lead to a 2 to 3 day counter-trend rally.

A trade through 19736 will signal a resumption of the downtrend. Buyers will have to take out 26962 in order to change the main trend to up.

A close over 20261 will form a closing price reversal bottom.

The minor range is 26962 to 19736. Its retracement zone at 23349 to 24202 is the nearest potential upside target.

Daily Technical Forecast

The direction of the June E-mini Dow Jones Industrial Average the rest of the session on Tuesday is likely to be determined by trader reaction to yesterday’s close at 20261.

Bullish Scenario

A sustained move over 20261 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into the steep downtrending Gann angle at 21842.

Look for sellers on the first test of 21842. Overtaking it could trigger an acceleration to the upside with the next target the minor 50% level at 23349.

Bearish Scenario

A sustained move under 20261 will signal the presence of sellers. The first downside targets are the intraday low at 19736, followed by a main bottom at 19558. The latter is a potential trigger point for an acceleration to the downside with the next target a main bottom at 17297.