Maintain long positions. The E-Mini Dow rebounded from its low, after testing the support level of 29,850 pts. Last Friday, the index started the session at 30,043 pts. It briefly traded near the day high of 30,089 pts, before selling pressure emerged, dragging the index towards the day low of 29,721 pts, and breaching the 30,000-pt psychological level. Buying interest came in halfway through the session, paring the earlier losses and sending the index higher to close at 30,033 pts. Although the index fell below the stop loss level at the end of the session, it recouped the losses, and we deem the support level as intact. With the latest price action, we think the uptrend structure remains valid, and we are still seeing a ‘higher highs’ and ‘higher lows’ bullish price pattern. As long as the index trades above the support level, we will keep our positive trading bias.

We recommend traders stay in long positions. Our previous long positions were closed out at 29,850 pts, after triggering the stop-loss. We re-initiated long positions at 30,033 pts, or the closing level of 11 Dec. For riskmanagement purposes, a stop-loss can be placed below the 29,750-pt mark.

The immediate support target is marked at 29,800 pts, followed by 30 Nov’s low of 29,428 pts. The immediate resistance is pegged at 30,265 pts, which was 7 Dec’s high, followed by 30,500 pts.

Source: RHB Securities Research - 14 Dec 2020