Maintain short positions. The E-Mini Dow staged a strong comeback in the latest session. It rebounded from a low of 29,116 pts to a high of 29,621 pts, to test the immediate resistance of 29,600 pts, before closing 334 pts higher at 29,546 pts. Despite the positive performance erasing the recent sessions’ declines, we are not seeing this as a signal that the index’s sideways correction phase, which started from the failed attempt to cross above the 30,000-pt resistance point two weeks ago, has reached an end. Towards the downside, at the minimum, we are expecting this correction phase to retest the 28,781-pt threshold. Maintain our negative trading bias.

We recommend traders stay in short positions. We initiated these at 29,212 pts – the closing level of 20 Nov. For risk-management purposes, a stop-loss can be placed above 29,800 pts.

The immediate support is revised to the 29,116 pts – the latest low, followed by 28,781 pts – the low of 10 Nov. Meanwhile, the resistance is maintained at 29,600 pts, followed by the 30,000-pt record high.

Source: RHB Securities Research - 24 Nov 2020