Maintain long positions. The E-Mini Dow settled its Dec 2020 contracts’ final trades at 30,363 pts after having ranged between 30,170 pts and 30,390 pts. The closing level was another record level for the index. From the trend perspective, the E-mini Dow’s upward move is still firmly in place despite its one month or so momentum showing signs of weakening – a typical sign of prices topping out. Also, the index has still not been able to confidently stand firmly above the 30,000-pt psychological mark – its first attempt to test this level happened almost 1.5 months ago. However, confirmation of a potential trend change – ie the E-mini Dow reaching its interim top – is likely to happen should the 29,848-pt support level be breached. Until this happens, we keep to our positive trading bias.

For now, we recommend traders stay in long positions. We initiated these at 30,033 pts, or the closing level of 11 Dec. For risk-management purposes, a stop-loss can now be placed below the 29,848-pt mark.

The immediate support is maintained at the 30,000-pt round figure and followed by 29,848 pts. On the upside, the immediate resistance is set at 30,500 pts and followed by 31,000 pts.

Source: RHB Securities Research - 21 Dec 2020