Maintain short positions, with a new trailing-stop set above the 24,700-pt resistance. The E-mini Dow ended higher to form a white candle last night. It gained 58 pts to close at 24,490 pts, off the session’s low of 23,894 pts. Technically speaking, yesterday’s white candle should be viewed as a technical rebound following the recent losses seen over the last one week. Currently, we think the bears may continue to control the market, as long as the E-mini Dow does not recoup more than 50% of the losses from 7 Dec’s long black candle. Overall, we remain negative in our outlook.

Based on the daily chart, the immediate resistance level is now anticipated at 24,700 pts, situated near the midpoint of 7 Dec’s long black candle. The next resistance would likely be at 25,190 pts, obtained from the high of 5 Dec. Towards the downside, we anticipate the immediate support level at 23,894 pts, which was the low of 10 Dec. Meanwhile, the next support is seen at 23,467 pts, determined from the previous low of 3 May.

To recap, on 5 Dec, we initially recommended traders to initiate short positions below the 25,500-pt level on 5 Dec. We continue to advise them to stay short for now, while setting a new trailing-stop above the 24,700-pt threshold. This is in order to lock in part of the profits.

Source: RHB Securities Research - 11 Dec 2018