Maintain short positions. The E-mini Dow ended lower to form a “Doji” candle last night. It slipped 16 pts to close at 25,660 pts after oscillating between a high of 25,781 pts and low of 25,441 pts. We note that the index is still trading below the 21-day SMA line and 26,238-pt resistance mentioned previously, which suggests that the bearish sentiment remains intact. Overall, we expect the market to drop further if the immediate 25,213-pt support is taken out decisively in the coming sessions.

Based on the daily chart, the immediate resistance is maintained at 26,238 pts – this was determined from the high of 25 Feb’s “Shooting Star” pattern. The next resistance will likely be at the 26,966-pt historical high. To the downside, we anticipate the immediate support at 25,213 pts, ie the low of 8 Mar. If a breakdown occurs, the next support is seen at 24,862 pts, which was the previous low of 8 Feb.

Therefore, we advise traders to maintain short positions, given that we initially recommended initiating short below the 25,707-pt level on 8 Mar. A stop-loss can be set above the 26,238-pt mark to minimise the risk per trade.

Source: RHB Securities Research - 28 Mar 2019