Stay short, with a stop-loss set above the 26,238-pt resistance. The E-mini Dow ended higher to form a white candle yesterday. It rose 182 pts to close at 25,735 pts after oscillating between a high 25,775 pts and low of 25,461 pts. Yet, we maintain our negative sentiment, as the index is still holding below the 21-day SMA line and recent high of the 26,238-pt resistance. As the bearishness of 25 Feb’s “Shooting Star” pattern has not been negated, this shows the buying momentum is considered weak. Overall, we keep our negative view on the E-mini Dow’s outlook.

As seen in the chart, we are eyeing the immediate resistance at 26,238 pts, which was the high of 25 Feb’s “Shooting Star” pattern. The next resistance will likely be at the 26,966-pt record high. On the other hand, we anticipate the near-term resistance at 25,213 pts, or the low of 8 Mar. This is followed by 24,862 pts, which was determined from the previous low of 8 Feb.

Consequently, we advise traders to maintain short positions, since we originally recommended initiating short below the 25,707-pt level on 8 Mar. A stop-loss is advisable – set above the 26,238-pt threshold – to minimise the risk per trade.

Source: RHB Securities Research - 14 Mar 2019