E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Weakening into Close on Profit-Taking

September E-mini Dow Jones Industrial Average futures are trading higher shortly before the cash market close on Wednesday despite giving back most of its earlier gains.

The blue chip average surged at the opening to nearly a four-month high following promising early data for a potential COVID-19 vaccine and a strong quarterly showing by Dow component Goldman Sachs.

At 19:07 GMT, September E-mini Dow Jones Industrial Average futures are at 26627, up 122 or +0.48%.

Moderna Inc rose 5.8% after a small-scale study showed its experimental COVID-19 vaccine produced high levels of virus-killing antibodies. Goldman Sachs rose 0.6% as its trading revenue doubled in the second quarter, driven by big swings in stock and bond markets since March.

Dow component UnitedHealth Group Inc fell 1.8% after warning of rising costs later this year as Americans catch up on less urgent surgeries halted by the coronavirus pandemic.

Microsoft Corp slipped after hitting a record high recently. Shares of Apple rose after the company won a landmark court case Wednesday against the European Commission over a dispute concerning 13 billion Euros ($14.9 billion) in Irish taxes.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade over the intraday high at 27063 will reaffirm the uptrend. The main trend will change to down on a move through the last swing bottom at 25293.

The minor trend is also up. A trade through 25874 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is 27466 to 24409. Its retracement zone at 26298 to 25938 is the nearest support zone.

Short-Term Outlook

Wednesday’s price action was awful. The news about Moderna and Goldman Sachs should’ve been enough to encourage investors to hold on to earlier gains. Instead, the Dow is in a position to form a potentially bearish closing price reversal top.

Watch the price action and read the order flow if 26491 is tested during the last hour of trading. A close below this level will form a closing price reversal top. If confirmed on Thursday, this could lead to a 2 to 3 day correction.

More importantly, trader reaction to a test of 26298 to 25938 will set the tone for the rest of the week.

For a look at all of today’s economic events, check out our economic calendar.