Strong Performance by E-mini Dow Puts 34288-34397 on Radar

June E-mini Dow Jones Industrial Average futures are trading higher shortly before the cash market close on Wednesday. The price action has been volatile with the blue chip index paring most of its gains then rebounding again after the Federal Reserve raised rates and said it would hike another six times this year, more aggressively than many investors had expected.

At 19:45 GMT, June E-mini Dow Jones Industrial Average futures are at 33733, up 306 or +0.92%. The SPDR Dow Jones Industrial Average ETF (DIA) is at $339.88, up $3.69 or +1.10%.

The Fed announced at the conclusion of its two-day meeting Wednesday that it will increase short-term interest rates by a quarter of a percentage point, a well-telegraphed move by the central bank as it seeks to control surging inflation. But it was the central bank’s outlook that surprised traders somewhat.

The Fed also forecast a consensus funds rate of 1.9% by year’s end, which would mean a hike at each of the remaining central bank meetings this year.

The broad-based rally was driven by shares of Boeing Co, Nike Inc and Salesforce.com, which gained 5.06%, 4.85% and 4.81%, respectively.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up earlier in the session when buyers took out the previous main top at 33588. A trade through 34018 will reaffirm the uptrend. A move through 32578 will change the main trend to down.

The nearest support is a minor pivot at 33275.

The short-term range is 35649 to 32086. The E-mini Dow is currently testing its retracement zone at 33868 to 34288.

The main range is 36708 to 32086. Its retracement zone at 34397 to 34942 is the next potential upside target.

The two retracement zones combine to form a potential resistance cluster at 34288 to 34397.

Short-Term Outlook

A close over the 50% level at 33868 will put the E-mini Dow in a position to open higher on Thursday. This could trigger an early surge into the main top at 34018.

Taking out the main top at 34018 will indicate the buying is getting stronger. This could trigger a further rally into the resistance cluster at 34288 to 34397. Sellers are likely to come in on a test of this area.