Maintain long positions. The E-mini Dow extended its wins into the third session, after recently testing the 30,000- pt psychological level. During intraday trade, the index tested the 31,000-pt level with a high of 31,087 pts, before closing 222 pts higher at 30,942 pts. The two most recent sessions’ performances have now placed the index relatively well above the 30,000-pt mark – after struggling to decisively stand firmly above this level in the prior weeks. Price momentum has also been improving in recent sessions, with the RSI crossing above the resistance line with latest reading of c.66 – below the overbought threshold. With no price exhaustion seen, the index’s uptrend from early-Nov 2020’s low is still firmly in place. 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 maintained at 30,500 pts and the 30,000-pt psychological level. On the upside, the immediate resistance is set at 31,000 pts, followed by 31,500 pts.

Source: RHB Securities Research - 8 Jan 2021