E-mini S&P 500 Index (ES) Futures Technical Analysis – Upside Momentum Building for Test of 3862.25

March E-mini S&P 500 Index futures are edging higher shortly after the cash market opening on Thursday as investors looked to corporate earnings and signs of progress on a pandemic-relief package after data suggested that the labor market was stabilizing.

The Labor Department’s report showed 779,000 Americans filed new applications for unemployment benefits last week, lower than 812,000 in the prior week, as authorities started to loosen pandemic-related restrictions on businesses.

At 14:56 GMT, March E-mini S&P 500 Index futures are trading 3837.75, up 14.25 or +0.37%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum has been higher since the closing price reversal bottom on Monday and its subsequent confirmation yesterday.

A trade through 3843.50 will indicate the counter-trend buying is getting stronger. A move through 3862.25 will change the main trend to up. The main trend changes to down on a trade through 3656.50.

The short-term range is 3656.50 to 3843.50. Its 50% level at 3749.75 is the first downside target.

The intermediate range is 3596.00 to 3862.25. Its retracement zone at 3729.25 to 3697.75 is a potential support area.

Daily Swing Chart Technical Forecast

Trader reaction to 3823.50 will set the tone on Thursday.

Bullish Scenario

A sustained move over 3823.50 will indicate the presence of buyers. Taking out 3843.50 will indicate the buying is getting stronger. If this creates enough upside momentum then look for the rally to possibly extend into the record high at 3862.25. Taking out this level will change the main trend to up. This could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 3823.50 will signal will signal the presence of sellers. This will put the index in a position to form a potentially bearish closing price reversal top. If confirmed then look for the start of a 2 to 3 day correction with 3749.75 a potential downside target.

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