Maintain long positions. The E-Mini Dow traded sideways in a 30,777-31,012-pt range before closing 72 pts better at 30,974 pts. The performance can be seen as an extension of the index’s minor consolidation phase, which started from 8 Jan’s high of 31,148 pts. It set in after it experienced a surge during the previous week, which sent the EMini Dow well past the 30,000-pt psychological level – after weeks lingering around that threshold. So far, the consolidation remains narrow in nature – in the range of 30,600-31,150 pts – and does not exhibit signs of developing into a deeper retracement. 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 set at the breakeven mark.

We are keeping the support levels at 30,500 pts and the 30,000-pt psychological level. Moving up, the immediate resistance remains at 31,000 pts, and followed by 31,500 pts.

Source: RHB Securities Research - 13 Jan 2021