E-mini S&P 500 Index (ES) Futures Technical Analysis – Trade Through 3878.25 Shifts Momentum to Down

March E-mini S&P 500 Index futures are edging lower shortly before the cash market opening on Friday. The weakness is being fueled by a decline in energy stocks. Meanwhile, some investors also booked profits after a rally on bets of fiscal stimulus and a vaccine-fueled bounce back in the economy.

At 12:16 GMT, March E-mini S&P 500 Index futures are trading 3903.50, down 8.50 or -0.22%.

Ahead of the cash market opening, Chevron Corp., Occidental Petroleum Corp. and Exxon Mobil Corp dipped between 0.9% and 1.2% in premarket trading as oil prices retreated on demand fears.

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 based on Wednesday’s potentially bearish closing price reversal top.

A trade through 3878.25 will confirm the closing price reversal top. This won’t change the trend to down, but it will shift momentum to the downside. This could trigger the start of a 2 to 3 day correction.

A move through 3928.50 will negate the closing price reversal top and signal a resumption of the uptrend.

The first minor range is 3928.50 to 3878.25. The index is currently straddling its pivot at 3903.50.

The second minor range is 3656.50 to 3928.50. If the momentum shifts to the downside then look for a possible break into its 50% level at 3792.50 over the next 2 to 3 sessions.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the index on Friday will be determined by trader reaction to the first minor pivot.

Bullish Scenario

A sustained move over 3903.50 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of 3928.50. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 3903.25 will signal the presence of sellers. This could trigger a fast break into 3878.25. The daily chart is wide open under this level so don’t be surprised by the start of an acceleration to the downside with 3792.50 the next likely target.

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