E-mini S&P 500 Index (ES) Futures Technical Analysis – Needs to Hold 3663.75 to Sustain Early Strength

March E-mini S&P 500 Index futures are trading higher on Monday shortly before the cash market opening as travel stocks surged on the launch of a nationwide COVID-19 vaccine campaign, while investors held out hope for more local stimulus as bipartisan talks continued.

At 13:57 GMT, March E-mini S&P 500 Index futures are trading 3680.50, up 27.00 or +0.74%.

Cruise operators Carnival Corp and Royal Caribbean Cruises rose 5.5% and 3.5%, respectively, in premarket trading, while stocks of major airline operators rose between 1.5% and 3.0%, with Jetblue Airways Corp leading gains.

Shares of delivery firms FedEx Corp and United Parcel Service Inc, which are leading the vaccine distribution project, rose about 2.2% and 2.1%, respectively.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on December 9. A trade through 3707.00 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest swing bottom at 3216.25.

If the index posts another higher-high on Tuesday then 3620.75 will become the new main bottom and change in trend point.

The minor trend is down. This confirms the shift in momentum. The minor trend will change to up on a move through 3707.00. A new minor bottom has formed at 3620.75.

On the downside, support is being provided by a series of 50% levels at 3663.75, 3645.25, 3620.50 and 3602.00. The latter is a potential trigger point for an acceleration to the downside.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the benchmark index will be determined by trader reaction to the pivot at 3663.75.

Bullish Scenario

A sustained move over 3663.75 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into 3707.00. Taking out this level will indicate the buying is getting stronger with no visible resistance in sight.

Bearish Scenario

A sustained move under 3663.75 will signal the presence of sellers. This could trigger a labored break with targets coming in at 3645.25, 3620.75, 3620.50 and 3602.00.

Taking out 3602.00 with conviction could trigger the start of a steep decline.

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