Maintain long positions. The E-Mini Dow ended its first session of 2021 with a black candle. This was after it failed to sustain its earlier session’s strong performance, which saw prices hitting a high of 30,691 pts. From that point, the index dived to a low of 29,760 pts to briefly test the 30,000-pt psychological level, before narrowing its losses to settle 393 pts lower, at 30,104 pts. The pullback happened after the index tested the 30,500-pt resistance level during the previous session, and attempted to cross above the RSI resistance line (as drawn in the chart). However, as previously mentioned, as long as the 30,000-pt psychological level is not breached at the closing, the index’s overall positive price trajectory will still be regarded as intact.

We recommend traders stay in long positions for now. We initiated these at 30,033 pts, or the closing level of 11 Dec 2020. For risk-management purposes, a stop-loss can now be placed below 30,000 pts.

Support levels are moved to the 30,000-pt psychological level, and 29,760 pts, which is the latest low. Moving up, the immediate resistance is now set at 30,250 pts, followed by 30,500 pts.

Source: RHB Securities Research - 5 Jan 2021