Initiate short positions below the 24,675-pt level. The E-mini Dow formed a long black candle last night, indicating that the selling momentum could be strong. It plunged 1,912 pts to settle at 23,877 pts. As the index has formed a third consecutive black candle and hit its lowest point in more than a year, this indicates that market sentiment is turning bearish. Yesterday’s closing also triggered out trailing-stop, which we initially recommended investors set at the 25,688-pt threshold.

Based on the daily chart, we anticipate the immediate resistance level at 24,675 pts – this is set near the midpoint of 9 Mar’s long black candle. The next resistance is seen at the 25,000-pt round figure. Towards the downside, the immediate support level is seen at 23,549 pts, ie the low of 9 Mar. The next support is situated at the 23,000-pt psychological mark.

Hence, we advise traders to initiate short positions below the 24,675-pt level. A stop-loss can be set above the 25,000-pt threshold to limit the risk per trade.

Source: RHB Securities Research - 10 Mar 2020