Maintain long positions. The E-Mini Dow came in near to testing the 29,850-pt immediate support with an intraday low of 29,868 pts. This was before it rebounded to narrow its losses to 53 pts to close at 30,010 pts – marginally above the 30,000-pt psychological mark. Given that said support continues to hold up – and the index still managed to close above the 30,000-pt level – there are still no negative price confirmations the E-mini Dow has reached an interim top and that a correction phase is setting in. Recall that its latest 1-month upward move has shown signs of losing momentum – a typical precursor of prices topping out. We maintain 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.

We are keeping the immediate support target at 29,850 pts. This is followed by 29,428 pts, which was 30 Nov’s low. Meanwhile, the immediate resistance is pegged at 30,265 pts – 7 Nov’s high – and followed by 30,500 pts.

Source: RHB Securities Research - 11 Dec 2020