E-mini S&P 500 Index (ES) Futures Technical Analysis – Needs to Stay Above 3141.50 to Sustain Rally

March E-mini S&P 500 Index futures are trading higher shortly before the cash market opening on Wednesday. Prices are trying to stabilize inside a key retracement zone, which to some represents value. In other words, professionals who believe in the long-run that stocks will be higher and that the coronavirus fears will subside, are buying the dip.

At 13:35 GMT, March E-mini S&P 500 Index futures are trading 3148.00, up 15.50 or +0.49%.

The first leg down from a top is usually long liquidation. This is usually followed by a 50% to 61.8% retracement of the break. How traders react to this retracement will determine whether the index move higher or lower.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 3397.50 will change the main trend to up. On the downside, the next major target is the December 3, 2019 main bottom at 3071.00.

The main range is 2855.00 to 3397.50. Its retracement zone at 3126.25 to 3062.25 was tested earlier today with the selling pressure stopping inside the zone at 3091.00.

The current short-term range is 3397.50 to 3091.00. Its retracement zone at 3244.25 to 3280.50 is the next potential upside target. This zone will move lower if the market makes a new low for the day.

Daily Technical Forecast

Based on the early price action, the direction of the March E-mini S&P 500 Index the rest of the session on Wednesday is likely to be determined by trader reaction to 3132.50.

Bullish Scenario

A sustained move over 3132.50 will indicate the presence of buyers. Taking out and sustaining a rally over the steep downtrending Gann angle at 3141.50 will indicate the buying is getting stronger.

If this move is able to generate enough upside momentum, we could see a rally into the short-term 50% level at 3244.25, followed by a pair of Gann angles at 3251.00 and 3269.50.

Since the trend is down, watch for sellers to emerge on a test of 3244.25 to 3280.50. They are going to try to form a secondary lower top.

Bearish Scenario

A sustained move under 3132.50 will signal the presence of sellers. Crossing to the weak side of the main 50% level at 3126.25 will indicate the selling is getting stronger.

If 3091.00 fails then look for the selling to extend into the main Fibonacci level at 3062.25, followed closely by an uptrending Gann angle at 3052.75. This is a potential trigger point for an even steeper break into the next uptrending Gann angle at 2953.75. This is the last major support angle before the 2855.00 main bottom.