E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Weekly Chart Strengthens Over 26220, Weakens Under 25452

June E-mini Dow Jones Industrial Average futures finished higher last week, reversing the prior week’s sell-off. The Dow is currently lagging behind the S&P 500 Index and NASDAQ due to its exposure to Boeing stock, which is taking a pounding because of two major airline crashes in six-months.

Last week’s price action, however, suggests the Boeing news has been priced in so investors are now responding to upbeat news about a potential trade deal between the United States and China, and the strong possibility the Fed will continue on its dovish path when it announces its interest rate and monetary policy decisions on Wednesday.

Last week, June E-mini Dow Jones Industrial Average futures settled at 25899.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, the market is showing signs of weakening upside momentum. A trade through 26263 will signal a resumption of the uptrend. The market isn’t close to changing its main trend to down, but there is room for a correction.

The minor trend is also up. A new main top was formed at 26263. A trade through this level will make 25246 a new minor bottom.

The main range is 26988 to 21550. The Dow is currently trading on the strong side of its retracement zone at 24911 to 24269. This is helping to generate an upside bias. Traders should consider this zone key long-term support.

Weekly Technical Forecast

The week begins with the June E-mini Dow Jones Industrial Average futures contract on the bullish side of the contract’s retracement zone and a steep uptrending Gann angle, moving up at a rate of 256 points per week from the late December bottom. This is helping to generate the longer-term upside momentum.

Bullish Scenario

If the rally continues this week then look for buyers to make a run at the downtrending Gann angle at 26220. This angle provided resistance three weeks ago.

Taking out the angle at 26220 will indicate the buying is getting stronger. This could trigger a rally into the minor top at 26263, followed closely by the main top at 26330.

A move through 26330 will reaffirm the uptrend with the next target angles coming in at 26604 and 26796. The latter is the last potential resistance angle before the 26988 main top.

 Bearish Scenario

The inability to overcome the angle at 26220 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to extend into the next downtrending Gann angle at 25452.

Crossing to the weak side of the angle at 25452 will indicate the selling is getting stronger. This could trigger a further decline into the major Fibonacci level at 24911. This is followed by Gann angle support at 24622, followed by the major 50% level at 24269.