Maintain long positions. The E-mini Dow tested the 30,000-pt psychological level for a second consecutive session with a low of 29,974 pts. This was before it staged a positive intraday price reversal to hand in a 181-pt gain to close at 30,185 pts. The positive performance suggests no negative follow-through from the prior session’s negative performance, which saw the index dropping from an intraday record-high of 30,691 pts. Additionally, the critical 30,000-pt level continues to hold up. All in, while the E-mini Dow continues to struggle to move meaningfully higher from the 30,000-pt level over the past few weeks, there is still no negative price confirmation to mark an end to the index’s positive price trend. Hence, 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 2020. For risk-management purposes, a stop loss can now be placed below 30,000 pts.

Support levels are still pegged at the 30,000-pt psychological and 29,760 pts thresholds – the latter was 4 Jan’s low. On the upside, the immediate resistance is set at 30,250 pts and followed by 30,500 pts.

Source: RHB Securities Research - 6 Jan 2021