Introduction
Dow Jones futures continue to perform well in the medium to long term, like the rest of the US equity markets. The interesting thing is that YM is actually performing slightly better in the short term than ES and NQ. We have seen a small consolidation in those markets while the Dow has actually continued to make new all-time highs.
Let’s take a closer look at the technicals and see if there are any possible trades we can take.
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YM Futures Trend Analysis
The RSI is approaching overbought, so there might be a small period of profit-taking coming up. The price is also well above both the 50 and the 200 ma. Whether this means its time for a pullback we will have to wait and see.
Being objective while looking at the chart is exceptionally important, and if we do that while analyzing YM futures, probabilities would lean more toward a possible pulback coming soon. This pullback doesn’t need to be a big one; it may only be a few days of red, however.
It will depend more on the time frame each trader has, because overall the market is still bullish so taking short trades, trying to predict that this is the top of the market is a risky one to call.
Key Support and Resistance Levels
Major Resistance Levels
- 53,500
- 54,000
- 55,000
Major Support Levels
- 52,500 recent breakout level
- 50,806 (50-day moving average)
- 48,655 (200-day moving average)
YM Futures Possible Trades
Pullback Trade Setup
Following the recent breakout to new highs, a period of consolidation or a shallow pullback would be a normal development. Traders may continue watching for bullish reactions near previous resistance around 52,500 or near the rising 50-day moving average.
This analysis is provided for educational and informational purposes only and should not be considered financial or trading advice. Trading futures, forex, and other leveraged financial instruments carries a high level of risk and may not be suitable for all investors. Past performance is not indicative of future results. Before making any trading decisions, conduct your own research, assess your risk tolerance, and consult with a qualified financial advisor if necessary.
