Maintain long positions. The E-Mini Dow, on an intraday basis, reached a record level of 30,309 pts. This, however, failed to sustain, as it slid to settle 107 pts weaker at 30,063 pts. It also briefly tested the 30,000-pt mark with an intraday low of 29,946 pts. The pullback from the new high was consistent with the index’s behaviour over the past month – of retracing after touching a new high – and continues to signal that its upward move lacks momentum. Nevertheless, it has yet to produce the required trend reversal signal – a downside breach of the 29,850-pt support level – to indicate that a price correction phase is setting in. Hence, we are keeping our positive trading bias.

We recommend traders stay in long positions. We initiated these at 30,198 pts, or the closing level of 4 Nov. For risk-management purposes, a stop loss can be placed below the 29,850-pt mark.

Immediate support is maintained at 29,850 pts, followed by 29,428 pts, which was the low of 30 Nov. The immediate resistance is still set at 30,265 pts, which was 7 Nov’s high, followed by 30,500 pts.

Source: RHB Securities Research - 10 Dec 2020