E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Big Decision at 34299 to 34459

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September E-mini Dow Jones Industrial Average futures are trading higher shortly after the cash market opening on Tuesday. The rally is being fueled by across the board gains in the financial, energy and technology sectors.

The price action seems to suggest that investors are downplaying concerns over rising COVID-19 variants and inflation, while shifting their focus back to earnings.

At 14:16 GMT, September E-mini Dow Jones Industrial Average futures are trading 34294, up 455 or 1.34%.

The rally was started after shares of IBM jumped after posting strong second-quarter results. Shares of International Business Machines Corp gained 4.0% in premarket trading as brokerages raised their price targets on the stock following strong quarterly growth in the company’s cloud and consulting businesses.

Dow component Chevron Corp helped lead the energy sector higher with a 1.32% gain. Rate-sensitive lenders JPMorgan and Goldman Sachs are up 1.52% and 2.19%, respectively.

Daily September E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Monday when sellers took out 34004. A trade through 34975 will change the main trend to up.

The main range is 31842 to 34975. Its retracement zone at 33409 to 33039 is the major support area. It is controlling the near-term direction of the Dow.

The short-term range is 32902 to 34975. Its retracement zone at 33939 to 33694 stopped the selling on Monday, helping to fuel today’s early rally.

The minor range is 34975 to 33623. Its retracement zone at 34299 to 34459 is the primary upside target. This area is currently being tested. Trader reaction to this zone will determine the direction of the Dow the rest of the week.

Daily Swing Chart Technical Forecast

The direction of the September E-mini Dow Jones Industrial Average futures contract into the close on Tuesday is likely to be determined by trader reaction to 34299.

Bullish Scenario

A sustained move over 34299 will indicate the buying is getting stronger. This could trigger a surge into the Fib level at 34459. Overtaking this level could trigger an acceleration to the upside with 34975 the next major target.

Bearish Scenario

A sustained move under 34299 will signal the return of sellers. If this creates enough downside momentum then look for a possible retest of 33939 to 33694.

If yesterday’s low at 33623 is taken out then look for the selling to possibly extend into 33409 to 33039, the main retracement area.

Side Notes

Trader reaction to 34299 to 34459 is likely to set the tone of the market the rest of the week. Sellers are likely to show up on a test of this area. They will be trying to produce a potentially bearish secondary lower top.

Aggressive counter-trend buyers will be trying to overcome 34459 in an effort to challenge the record high at 34975.

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This article was originally posted on FX Empire