Maintain short positions. The E-mini Dow managed to reverse its earlier session’s weak performance, which saw the index coming in near to testing the 50-day SMA line with a 25,293-pt low. This was before it rebounded to close 406 pts higher at 25,977 pts. The E-mini Dow has been trading in a possible sideways pattern – around the 50-day and 200-day SMA lines – over the past few weeks. At this juncture, as long as the index is still capped by the 26,294-pt resistance, the downside risk remains high. Premised on this, we keep to our negative trading bias.

We recommend traders stay in short positions. We initiated these at 25,165 pts, which was the closing level of 11 Jun. For risk-management purposes, a stop-loss is recommended above the 26,294-pt mark.

The immediate support is revised to 25,500 pts, and followed by 25,200 pts. Meanwhile, the immediate resistance is set at the 26,000-pt round figure, and followed by 26,294 pts, or the high of 23 Jun

Source: RHB Securities Research - 13 Jul 2020