Maintain long positions. In its last trading day for the year 2020, the E-Mini Dow briefly tested the 30,500-pt resistance threshold with an intraday high of 30,526 pts, before settling at 30,497 pts - a record closing level. Although its recent weeks’ upward moves were not as aggressive as before, the latest positive price action confirms that the trend is within the bulls’ control. Additionally, the RSI reading, which is curving upwards with a current reading of 63.5 and close to breaking out from its resistance line (as drawn in the chart), shows price momentum has improved after the sharp washout session of 21 Dec 2020. Towards the downside, we now believe that as long as the 30,000-pt psychological mark is not breached, the index’s uptrend will remain intact. We maintain 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 now be placed below 30,000 pts.

Support levels are now marked at 30,166 pts – the low of 29 Dec, and followed by the 30,000-pt psychological level. On the upside, the immediate resistance is pegged at 30,500 pts, followed by 30,750 pts.

Source: RHB Securities Research - 4 Jan 2021