E-mini S&P 500 Index (ES) Futures Technical Analysis – Potential Weekly Chart Breakout Over 2711.50

March E-mini S&P 500 Index futures surged on the daily chart on Wednesday, putting the index in a position to breakout to the upside on the weekly chart. Overcoming the next target will mean the index has recovered more than 62% of its break from its late September top to its late December bottom.

At 04:05 GMT, March E-mini S&P 500 Index futures are trading 2691.25, up 8.75 or +0.33%.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom at 2316.75 the week-ending December 28.

The main trend will change to up on a trade through 2955.50. A trade through 2316.75 will negate the closing price reversal bottom and signal a resumption of the uptrend. The swing chart also indicates we have about 2 to 5 weeks before we can start looking for a closing price reversal top.

The minor trend is also down. A move through 2819.00 will change the minor trend to up. This will also confirm the shift in momentum to the upside. This top is followed by another minor top at 2824.50.

The main range is 2955.50 to 2316.75. The index is currently trading inside its retracement zone at 2636.00 to 2711.50. This zone is controlling the longer-term direction of the index.

Weekly Technical Forecast

Based on this week’s price action and the current price at 2691.25, the direction of the market the rest of the week will be determined by trader reaction to the Fibonacci level at 2711.50.

Bullish Scenario

Taking out 2711.50 and sustaining the rally will indicate the buying is getting stronger. If this move can create enough upside momentum then look for a surge into the next downtrending Gann angle at 2803.50.

Bearish Scenario

The inability to overcome 2711.50 will signal the return of sellers. If the selling is strong enough then look for a potential pullback into a cluster of support targets at 2651.50, 2636.75 and 2636.00.

Watch for aggressive counter-trend buyers to defend the rally on a pullback into 2636.75 to 2636.00.

The only danger for the bullish traders at this time is a massive failure at 2636.00. Taking out this level could trigger the start of a steep break.