E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 2625.00, Weakens Under 2508.25

March E-mini S&P 500 Index futures are trading sharply higher shortly after the opening on Friday after bargain hunters stepped in following yesterday’s worst loss since the “Black Monday” market crash in 1987. Before the opening, the benchmark S&P 500 Index hit “limit up”, suggesting there was a pool of buyers trying to get long.

At 13:33 GMT, March E-mini S&P 500 Index futures are trading 2613.00, up 144.00 or +5.83%.

Traders said the early rally was being fueled by positive comments from House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin. Both said U.S. lawmakers and the White House were close to a deal on economic relief amid the coronavirus outbreak.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, the early price action suggests that buyers may be trying to form a potentially bullish closing price reversal bottom.

A trade through 2393.50 will signal a resumption of the downtrend. The main trend will change to up on a move through the last swing top at 3137.00.

A close over 2469.00 will form a closing price reversal bottom. If confirmed on Monday, this chart pattern could trigger the start of a 2 to 3 day counter-trend rally.

The main range is 3397.50 to 2356.00. Its retracement zone at 2754.00 to 2876.75 is the primary upside target and possible resistance zone.

Daily Technical Forecast

Based on the early price action and the current price at 2613.00, the direction of the March E-mini S&P 500 Index the rest of the session on Friday is likely to be determined by trader reaction to Thursday’s close at 2469.00.

Bullish Scenario

A sustained move over 2469.00 will indicate the presence of buyers. Overcoming the Gann angle at 2508.25 will indicate the buying is getting stronger. This could lead to a test of the steep downtrending Gann angle at 2625.00. We already saw that move this morning.

Overtaking 2625.00 will indicate the buying is getting stronger, while crossing to the strong side of the Gann angle at 2661.25 could trigger an acceleration into the main Fibonacci level at 2754.00.

The Fib level at 2754.00 could act as resistance on the first test, however, overtaking it could trigger an acceleration into the 50% level at 2876.75.

Bearish Scenario

The inability to overcome the downtrending Gann angle at 2625.00 will indicate the presence of sellers. Falling below the uptrending Gann angle at 2508.25 will indicate the buying is getting weak.

Turning lower for the session under 2469.00 will mean that sellers have regained control. This could trigger a further decline into 2431.25, 2393.50 and 2356.00.

Look out below if 2356.00 fails as support.