E-mini S&P 500 Index (ES) Futures Technical Analysis – Set Up for Closing Price Reversal Top

March E-mini S&P 500 Index futures retreated from record highs on Friday as a coronavirus stimulus deal remained in focus ahead of a weekend deadline, while Tesla shares hit their highest in anticipation of their addition to the S&P 500 next week.

The benchmark index is likely to see increased trading volumes in the day due to the expiration of stock index futures, stock index options and single stock futures at the end of trade, also known as quadruple witching.

The early price action indicates a potentially bearish closing price reversal top may be forming. This won’t change the trend, but it could trigger the start of a 2 to 3 day correction.

At 17:24 GMT, March E-mini S&P 500 Index futures are trading 3696.75, down 16.00 or -0.43%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum may be getting ready to shift to the downside with the formation of an intraday closing price reversal top.

A trade through the intraday high at 3723.00 will signal a resumption of the uptrend. A move through 3620.75 will change the main trend to down.

The minor range is 3620.75 to 3723.00. Its 50% level at 3671.75 is the primary downside target.

The second minor range is 3497.25 to 3723.00. If the trend changes to down then its retracement zone at 3610.00 to 3583.50 will become the primary downside target area.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index futures contract into the close on Friday is likely to be determined by trader reaction to 3714.50.

Bearish Scenario

A sustained move under 3714.50 will indicate the presence of sellers. The first downside target is 3671.75. We could see a technical bounce on the first test of this level. If it fails, we could see an acceleration to the downside with 3620.75 to 3610.00 the next likely targets.

Bullish Scenario

A sustained move over 3714.50 will signal the presence of buyers. This could lead to a retest of the intraday high at 3723.00. Taking out this high could trigger a surge to the upside.

Side Notes

A close under 3714.50 will form a closing price reversal top. If confirmed, this could lead to the start of a 2 to 3 day correction. The first target will be 3671.75. The second target is 3610.00 to 3583.50. The main target and value area is 3469.50 to 3410.00.

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