E-mini S&P 500 Index (ES) Futures Technical Analysis – Bullish Tone on Sustained Move Over 3308.75

December E-mini S&P 500 Index futures are trading sharply higher shortly after the cash market opening on Monday following the longest losing streak in a year for the benchmark, with investors piling into shares of beaten-down sectors, including banks and travel. Investors continue to add on to last week’s strong performance in heavyweight technology issues.

At 14:02 GMT, December E-mini S&P 500 Index futures are trading 3328.75, up 41.50 or 1.23%.

Shares of American Airlines Group Inc, United Airlines, cruise operators Royal Caribbean Cruises Ltd and Carnival Corp rose between 2.5% and 5.6% in early trading.

Big banks JPMorgan Chase & Co, Goldman Sachs Group Inc, Morgan Stanley, Wells Fargo & Co and Bank of America Corp and Citigroup added between 0.8% and 2%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom on September 24 and its subsequent confirmation on Friday.

A trade through 3198.00 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend changes to up on a trade through 3419.50.

The main support zone is 3246.25 to 3168.50. This area stopped the selling at 3198.00 on September 24.

The minor range is 3419.50 to 3198.00. The market is currently trading on the strong side of its 50% level at 3308.75.

The short-term range is 3576.25 to 3198.00. Its retracement zone at 3387.25 to 3431.75 is the next potential upside target area.

Daily Swing Chart Technical Forecast

Based on the early price action

Bullish Scenario

A sustained move over 3308.75 will indicate the presence of buyers. If this move creates enough upside momentum over the near-term then we could see a drive into the short-term retracement zone at 3387.25 to 3431.75. Inside this zone is the main top at 3418.50. A trade through this level will change the main trend to up.

Bearish Scenario

A sustained move under 3308.75 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main 50% level at 3246.25.