E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Weak Under 33812, Strong Over 34026

Wall Street shares soared on Monday, with the Dow Jones Industrial Average posting its strongest session in over three months as investors took advantage of relatively low prices and moved their funds back into energy and other sectors, betting they would outperform as the economy rebounds from the COVID-19 pandemic.

At 04:56 GMT, September E-mini Dow Jones Industrial Average futures are trading 33854, up 93 or +0.28%.

Monday’s rally represented a stark reversal from last week, when the Fed’s hawkish signals on monetary policy sparked a round of profit-taking that wiped out value stocks’ lead over growth this month and triggered the worst weekly performance for the Dow in months.

Later on Tuesday at 18:00 GMT, traders will get the chance to respond to testimony before Congress by Fed Chair Jerome Powell.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. Momentum shifted to the upside earlier in the session when buyers confirmed Monday’s closing price reversal bottom.

A trade through 32902 will negate the closing price reversal bottom and signal a resumption of the downtrend. A move through 34721 will change the main trend to up.

The main range is 31842 to 34883. Its retracement zone at 33363 to 33004 is support. This area was tested successfully on May 13 at 33131 and again on Monday.

The short-term range is 34721 to 32902. Its retracement zone at 33812 to 34026 is potential resistance. This zone is currently being tested. Since the main trend is down, sellers could show up on a test of this zone in an attempt to form a potentially bearish secondary lower top.

Daily Swing Chart Technical Forecast

The direction of the September E-mini Dow Jones Industrial Average on Tuesday is likely to be determined by trader reaction to 33812.

Bearish Scenario

A sustained move under 33812 will indicate the presence of sellers. If this move creates enough downside momentum then look for a possible retest of 33363 to 33004.

Bullish Scenario

A sustained move over 33812 will signal the presence of buyers. If this move attracts new buyers then look for a surge into 34026. Watch for sellers on the first test of this level. Overcoming it could trigger an acceleration to the upside.