March E-mini Dow Jones Industrial Average futures are trading nearly flat shortly before the cash market opening. The Dow is trading inside yesterday’s range while straddling a short-term retracement zone, suggesting investor indecision and impending volatility.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 23088 will signal a resumption of the downtrend. This could create the momentum needed to challenge the next potential support at 22148.
A trade though 25239 will change the minor trend to up.
The short-term range is 23088 to 25239. Its retracement zone at 24164 to 23910 is currently being tested. This zone is important to the structure of the market on the daily chart. Aggressive counter-trend buyers are coming in on the test of this zone in an effort to form a secondary higher bottom.
Sellers are trying to drive the Dow through this zone in an effort to test or even take out 23088.
The main range is 26684 to 23088. Its retracement zone at 24886 to 25310 is the upside target and resistance zone. Sellers stopped the rally on Wednesday inside this zone at 25239.
Daily Technical Forecast
Based on early trade, the direction of the Dow the rest of the session is likely to be determined by trader reaction to the short-term Fib level at 23910.
A sustained move under 23910 will signal the presence of sellers. If volume increases on the move, we could plunge early in the session to 23088. If this fails then 22148 is next.
We’re down nine session from the last main top so we are in the window of time for a closing price reversal bottom. Be careful selling weakness through 23088 because of the possibility of a reversal to the upside.
A sustained move over 23910 will indicate the presence of buyers. This could drive the Dow into the 50% level at 24164. Overtaking this level will lead to a test of a steep downtrending Gann angle at 24380.
We could see a technical bounce lower on the first test of 24380, but if it is overcome by buyers then look for an acceleration into 24886, 25239 or 25310.
Overtaking 25310 will indicate the buying is getting stronger, but buyers will still have to overcome a downtrending angle at 25532 in order to trigger a breakout to the upside.
This article was originally posted on FX Empire
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