Initiate long positions. The E-Mini Dow formed a second strong white candle in the latest session. This has negated our previous expectation for the index to extend its sideway trading pattern. The index generally trended higher for the whole session, with the low and high posted at 29,552 pts and 30,067 pts, before closing at 29,998 pts – a record closing high. Unlike the previous two attempts to breach above the 30,000-pt resistance mark, the latest attempt was much stronger as the index briefly overshot the 30,000-pt mark, and the closing level did not signal a clear rejection from the said resistance level. There is now a high possibility that the index has completed its two-week correction phase, and it is on the path of extending its uptrend. Switch our trading bias from negative to positive.

Our previous short positions initiated at 29,212 pts – the closing level of 20 Nov – were closed out at 29,800 pts in the latest session. Concurrently, we initiate long positions. For risk-management purposes, a stop-loss can be placed below 29,750 pts.

Support levels are now expected at 29,750 pts and 29,500 pts. On the upside, the immediate resistance is set at the 30,000-pt mark, followed by 30,500 pts.

Source: RHB Securities Research - 25 Nov 2020