Maintain short positions. The E-mini Dow ended the latest session 67 pts higher, at 27,612 pts, with trading taking place in the 27,440-27,828 pt range. The index’s price actions over the past three sessions indicate a minor rebound phase is likely taking place. This came after the index experienced a relatively sharp retracement between 3 and 8 Sep, which saw it fall almost 2,000 pts – at one point it came close to testing the 200-day SMA line. Without a clear price signal to mark an end to the said sharp retracement phase, we are keeping our negative trading bias.

We recommend traders to stay in short positions. We initiated these at 27,525 pts, the closing level of 8 Sep. For risk-management purposes, a stop-loss can be placed above the 28,500-pt mark.

The immediate support is maintained at 27,392 pts, which is the low of 20 Aug. This is followed by the 27,000-pt round figure, a level slightly below the 200-day SMA line. Moving up, the resistance points are pegged at 27,800 pts and 28,000 pts.

Source: RHB Securities Research - 14 Sept 2020