E-mini S&P 500 Index (ES) Futures Technical Analysis – Testing Major RT Zone: Strengthens Over 2748.50, Weakens Under 2701.75

E-mini S&P 500 Index futures finished lower but still managed to recover most of its earlier losses. The price action suggests that the index may have found the sweet spot on the charts that is attractive to value-seekers or aggressive counter-trend buyers. Early in the session on Wednesday, the index is trading slightly higher, but there has been no follow-through to the upside.

At 0321 GMT, December E-mini S&P 500 Index futures are trading 2749.00, up 2.75 or +0.10%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Tuesday when sellers took out the previous main bottom at 2712.25. Closing above this level may have cleared out the shorts that sold weakness on Tuesday.

A trade through 2692.25 will signal a resumption of the downtrend. If this creates enough downside momentum then the May 3 bottom at 2602.75 will become the next downside target. Taking out 2824.25 will change the main trend to up.

The major retracement zone at 2748.50 to 2701.75 is support. Traders took out the lower or Fibonacci level of this zone on Tuesday, but could not drive the index through it.

The short-term range is 2824.25 to 2692.25. Its retracement zone at 2758.25 to 2774.00 is the next upside target and potential resistance.

The intermediate range is 2947.00 to 2692.25. Its retracement zone at 2819.75 to 2849.75 is the second target zone.

Daily Swing Chart Technical Forecast

Based on Tuesday’s close at 2746.25 and the early price action, the direction of the December E-mini S&P 500 Index on Wednesday is likely to be determined by trader reaction to the major 50% level at 2748.50.

Bearish Scenario

A sustained move under 2748.50 will indicate the presence of sellers. If this creates enough downside momentum then we could see a retest of the Fib level at 2701.75 and yesterday’s low at 2692.25.

Taking out 2692.25 with conviction could trigger an acceleration to the downside with the primary downside target the May 3 bottom at 2602.75.

Bullish Scenario

A sustained move over 2748.50 will signal the presence of buyers. This could create an early labored rally with short-term retracement targets coming in at 2758.25 and 2774.00.

Overcoming 2774.00 will indicate the counter-trend buying is getting stronger. This could trigger a potential acceleration to the upside with the first target area 2819.75 to 2824.25.

Taking out 2824.25 will change the main trend to up.