Stay short provided that the 28,197-pt resistance is not violated at the closing. The E-mini Dow ended higher to form a white candle last night. It gained 207 pts to settle at 28,131 pts, off its low of 27,856 pts. However, we maintain our negative sentiment as the index failed to close above the 28,197-pt resistance mentioned previously. On a technical basis, as the bearishness of 2-3 Dec’s black candles has not been negated, this shows that the buying momentum is considered weak. Overall, we remain negative on the E-mini Dow’s outlook.

As seen in the chart, the immediate resistance level is seen at 28,197 pts, determined from the high of 2 Dec’s long black candle. The next resistance will likely be at the 28,500-pt round figure. On the other hand, we are eyeing the immediate support level at 27,312 pts, which was the low of 3 Dec. Meanwhile, the next support is anticipated at 26,847 pts, ie the previous low of 31 Oct.

Therefore, we advise traders to stay short, given that we previously recommended initiating short below the 27,650- pt level on 4 Dec. In the meantime, a stop-loss can be set above the 28,197-pt threshold in order to minimise the risk per trade.

Source: RHB Securities Research - 13 Dec 2019