After an early session setback, December E-mini Dow Jones Industrial Average futures have turned slightly higher. The early price action, however, has helped form a new main top. The Dow is not in a position to change trend, but there is plenty of room for a correction into a value zone.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 24536 will signal a resumption of the uptrend.
The main range is 23205 to 24536. Its retracement zone at 23871 to 23713 is the primary downside target. Since the main trend is up, we’re likely to see buyers show up on a test of this zone. An uptrending Gann angle also passes through this zone at 23653, making it a valid downside target also.
Daily Technical Forecast
Based on the early price action, the direction of the Dow today is likely to be determined by trader reaction to the uptrending Gann angle at 24101.
A sustained move over 24101 will indicate the presence of buyers. This could lead to a fast rally into a steep downtrending angle at 24280. This is a potential trigger point for an acceleration into a pair of downtrending Gann angles into 24408 then 24472. The latter is the last potential resistance angle before the 24536 main top.
The daily chart indicates there is plenty of room to the downside under 24101. However, selling volume is going to have to increase to sustain the move. If the selling is strong enough to generate enough downside momentum, we could see a minimum break into the main 50% level at 23871.
Watch the price action and read the order flow at 24101. Trader reaction to this Gann angle will tell us if the buyers have returned or if sellers are increasing their pressure.
This article was originally posted on FX Empire
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