Initiate short positions. The E-Mini Dow extended its slow retracement for the third consecutive session, closing 245 pts lower at 29,629 pts after rebounding from a low of 29,428 pts. The closing level placed the index below the previous immediate support level of 29,750 pts, indicating that the ongoing consolidation phase is no longer taking the shape of a narrow sideways trading range. The correction phase set in following the index’s two unsuccessful attempts to close above the 30,000-pt psychological resistance level last week. Premised on this, we switch our trading bias from positive to negative.

Our previous long positions, initiated at 29,998 pts or the closing level of 24 Nov, were closed out at 29,750 pts in the latest session. Concurrently, we initiate short positons. For risk-management purposes, a stop-loss can be placed above 30,000 pts.

Immediate support is revised to 29,500 pts, followed by the 29,000-pt round figure. On the upside, the immediate resistance is now pegged at 29,800 pts, followed by the 30,000-pt mark.

Source: RHB Securities Research - 1 Dec 2020