Maintain long positions. The E-mini Dow tracked the upward movements of its regional peers, adding 90 pts to settle at 30,328 pts. The index opened at 30,273 pts and tested the day low of 30,211 pts, before reaching the day high of 30,416 pts. The bulls were still hesitant to move beyond the 30,418-pt resistance mark. Underpinned by the RSI moving higher, we keep our view that the index will eventually breakout from the resistance. Meanwhile, the downside risk of breaching the support level is low. Note that in the last four sessions, the index traded within a tight range. A breakout of from either the resistance level of 30,418 pts, or the support level of 29,850 pts, will see the trading range expand, and mark the start of a new trend. Until then, we keep 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 29,750 pts.

The immediate support is marked at 29,850 pts, followed by 29,318 pts. Moving up, the immediate resistance is pegged at 28 Dec’s high of 30,418 pts, followed by the 30,500-pt round figure.

Source: RHB Securities Research - 31 Dec 2020