Stay in short positions, as the correction phase still has room to go further. The E-mini Dow ended 515 pts stronger at 26,320 pts, placing the index marginally above the 200-day SMA line. While the index has staged a relatively strong rebound from its prior session’s low of 24,550 pts, we do not see this as a possible sign that its correction phase - which started from the high of 9 Jun - has reached an end. This ongoing retracement phase is meant to correct the index’s previous multi-week sharp rebound. Hence, we are keeping our negative trading bias.

We recommend that traders stay in short positions. We initiated these at 25,165 pts – the closing level of 11 Jun. We revise our stop-loss to above the 27,000-pt level.

The immediate support is revised to 25,800pts, which is near the latest low. This is followed by the 25,000-pt round figure. Moving up, the immediate resistance is now pegged at 26,779 pts – the latest high – and this is followed by 27,000 pts.

Source: RHB Securities Research - 17 Jun 2020