Maintain short positions as the retracement phase is still incomplete. The E-mini Dow extended its rebound for the second consecutive session, following the testing of the 50-day SMA line in the prior session. At the closing, the index added 192 pts to close at 25,689 pts. We believe the index still has to stage a positive follow-up in the coming sessions to suggest a stronger rebound is developing. Until this happens, the retracement phase that started from the high of 27,624 pts on 9 Jun is still considered intact – more so as it is still capped by the 200-day SMA line. Maintain our negative trading bias.

We recommend that traders stay in short positions. We initiated these at 25,165 pts, which was the closing level of 11 Jun. We revise our stop-loss to above 26,779 pts.

The immediate support is revised to 25,200 pts, the price point of 29 Jun, followed by 24,740 pts – near the low of 29 Jun. Moving up, the immediate resistance is now eyed at 26,250 pts – near the 200-day SMA line. This is followed by 26,779 pts, the high of 16 Jun

Source: RHB Securities Research - 1 Jul 2020