Maintain long positions. The E-mini Dow saw some consolidation last Thursday, rising 75 pts from Wednesday’s session to settle at 30,109 pts. The index had a positive opening, gapping 49 pts higher to open at 30,083 pts. After the session started, buying interest was seen near the day low of 29,997 pts, while profit taking occurred near the day high of 30,151 pts. The E-mini Dow managed to cross the 30,000-pt psychological level to close at 30,109 pts. As the RSI indicator is curving higher, we tend to expect that – in the immediate term – the index will test the upside resistance marked at 30,333 pts. If it breaches the resistance post consolidation, the next hurdle will be near 30,500 pts. Since there are no negative signals yet, we keep to our positive trading bias.

We recommend traders stay in long positions for now. We initiated these at 30,033 pts, or the closing level of 11 Dec. For risk-management purposes, a stop loss can be placed below the 29,750-pt threshold.

The immediate support is revised to 29,850 pts – this is followed by 29,500 pts. Moving up, the immediate resistance is set at the recent high of 21 Dec – 30,333 pts – and followed by the 30,500-pt round figure

Source: RHB Securities Research - 29 Dec 2020