Maintain long positions. The E-Mini Dow reversed from its earlier session’s encouraging performance, which saw the index crossing above the 30,000-pt resistance mark with a high of 30,165 pts, before sliding to close at 29,828 pts – a 170-pt drop. The index has attempted to cross above the 30,000-pt resistance level four times over the past two weeks. The two most recent sessions’ attempts were stronger than the previous two, as the index briefly crossed above the said threshold on an intraday basis. Despite the latest failure to close above this threshold, we do not see a sufficient negative price signal – a closing below the 29,750-pt support level – to call for a possible price rejection. Hence, we are keeping our positive trading bias.

In the absence of a price reversal signal, we recommend traders stay in long positions. We initiated these at 29,998 pts – the closing level of 24 Nov. For risk-management purposes, a stop-loss can be placed below 29,750 pts.

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

Source: RHB Securities Research - 26 Nov 2020