Yahoo Finance E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Setting Up for Reversal Top
June E-mini Dow Jones Industrial Average futures are trading higher shortly after the cash market opening, but has given up most of its earlier gains. The benchmark S&P 500 Index and the technology-based NASDAQ Composite have given back all of their earlier gains and are now trading lower for the session. Traders said a huge drop in tech shares is responsible for the reversal to the downside.
At 14:47 GMT, June E-mini Dow Jones Industrial Average futures are trading 25024, up 14 or +0.06%.
Based on the intraday downside momentum, it may be just a matter of time before the Dow cash and futures turn negative for the session. Weakness in Dow components Apple, Microsoft and IBM are weighing on the blue chip index.
Bank stocks were broadly higher earlier in the session as investors reacted to the prospects of the economy reopening. Gains were led by Citigroup which was up 4.9%, followed by JPMorgan Chase which posted an earlier gain of 3.6%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out yesterday’s high. The main trend will change to down if sellers can take out the last main bottom at 22704.
The minor trend is also up. A trade through 24076 will change the minor trend to down. This will also shift momentum to the downside.
The main range is 29506 to 18086. Its retracement zone at 23796 to 25144 is controlling the longer-term direction of the Dow. The major average is currently testing this zone.
The strongest support may be the price cluster at 23796 to 23571.
Daily Swing Chart Technical Forecast
Given the prolonged rally in terms of price and time, the direction of the June E-mini Dow Jones Industrial Average the rest of the session on Wednesday is likely to be determined by trader reaction to yesterday’s close at 25002.
Bullish Scenario
A sustained move over 25002 will indicate the presence of buyers. Overtaking the major Fibonacci level at 25144 will signal that the buying is getting stronger. If this is able to generate enough upside momentum over the near-term then look for a possible extension of the rally into 26962.
Bearish Scenario
A sustained move under 25002 will signal the presence of sellers. This will also put the Dow in a position to form a potentially bearish closing price reversal top. If confirmed, this could lead to a 2 to 3 day correction.
The first downside target is the minor bottom at 24076. This is followed by the support cluster at 23796 to 23571.
This article was originally posted on FX Empire
