The bearish trend is likely to resume – stay short. The E-mini Dow’s selling momentum continued as expected. A long black candle was formed last night, which pointed towards a continuation of the downside move. The index lost 1,274 pts to close at 23,575 pts, off the session’s high of 24,890 pts. As it has erased the previous day’s gains and marked a lower close below the declining 10-day SMA line, this indicates that the bears are extending their selling pressure. Overall, we remain bearish on the E-mini Dow’s outlook.

Based on the daily chart, we are eyeing the immediate resistance level at 24,300 pts, which is set near the midpoint of 11 Mar’s long black candle. The next resistance will likely be at the 25,000-pt round figure, in our view, near 10 Mar’s high as well. To the downside, the near-term support level is seen at 23,300 pts, ie 11 Mar’s low. This is followed by the 23,000-pt psychological spot.

Hence, we advise traders to maintain short positions, given that we previously recommended initiating short below the 24,675-pt level on 10 Mar. For now, a trailing-stop can be set above the 24,300-pt threshold to limit the risk per trade.

Source: RHB Securities Research - 12 Mar 2020