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E-mini Dow Jones Industrial Average (YM) Futures Analysis – Caught Between Pair of Retracement Zones

James Hyerczyk

An average of U.S. blue chip stocks finished higher last week after giving back most of the gains achieved earlier in the week. The price action suggests investors are still a little tentative about buying strength which could lead to a pullback into support over the near-term.

For the week, June E-mini Dow Jones Industrial Average futures settled at 24433, up 97 or +0.40%.

Weekly June E-mini Dow Jones Industrial Average

Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart despite the sharp sell-off in February. However, momentum has been trending lower since late January with the formation of the weekly closing price reversal top at 26723.

The minor trend is up. A move through 25832 will reaffirm the minor trend. A trade through 23306 will change the minor trend to down.

A move through 23122 will create a major shift in investor sentiment.

The main range is the contract range of 21150 to 26723. Its retracement zone at 23937 to 23279 is major support. This zone essentially provided support at 23122 and 23306.

The minor range is 26723 to 23122. Its retracement zone at 24923 to 25347 is the primary upside target and resistance.

Weekly Swing Chart Technical Forecast

Based on last week’s price action, the direction of the June E-mini Dow Jones Industrial Average futures contract this week is likely to be determined by trader reaction to the short-term 50% level at 24923.

A sustained move under 24923 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the major 50% level at 23937.

We could see a technical bounce on the first test of 23937, but if it fails then look for a possible acceleration to the downside with potential targets coming in at 23306, 23279 and 23122.

Look for a technical bounce on the first test of the short-term 50% level at 24923. If buyers can overcome this level, we could see a surge into the short-term Fibonacci level at 25347. Once again, look for a technical bounce on the first test of this level.

Overcoming 25347 could generate the momentum needed to challenge 25832. Overtaking this level could set in motion a sharp rally to the upside.

This article was originally posted on FX Empire

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