E-mini S&P 500 Index (ES) Futures Technical Analysis – Trade Through 3714.50 Confirms Reversal Top

March E-mini S&P 500 Index futures are inching higher shortly before the cash market opening on Wednesday as investors threw their attention toward prospects of a gradual vaccine-led economic recovery next year and more monetary and fiscal support.

Lifting sentiment overnight was Britain’s approval of the emergency use of AstraZeneca and Oxford University’s COVID-19 vaccine after the benchmark index slipped from an intraday record high on Tuesday on uncertainty over bigger stimulus checks.

At 14:13 GMT, March E-mini S&P 500 Index futures are trading 3729.25, up 9.25 or +0.25%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but the formation of a closing price reversal top on Tuesday may be an early indication of a shift in momentum.

A trade through 3714.50 will confirm the potentially bearish closing price reversal top. This could trigger the start of a 2 to 3 day correction and a shift in momentum.

A move through 3747.75 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor range is 3596.00 to 3747.75. Its 50% level at 3671.75 is the first downside target and possible support.

The next minor range is 3497.25 to 3747.75. Its 50% level at 3622.50 is another potential support level.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index on Wednesday is likely to be determined by trader reaction to the high at 3747.75 and the low at 3714.50.

Bullish Scenario

A sustained move over 3747.75 will negate the closing price reversal top and signal a resumption of the uptrend. This will also indicate the presence of buyers. Gains could be limited by the low volume.

Bearish Scenario

A sustained move under 3714.50 will signal the presence of sellers. This will confirm the closing price reversal top. The move won’t change the main trend to down, but it could trigger the start of a 2 to 3 day correction with 3671.75 the first downside target.

Taking out 3671.75 could trigger an acceleration into 3622.50.