Maintain long positions. The E-Mini Dow’s latest price action was uneventful, as it extended its possible sideways consolidation phase into a fourth session following last week’s gains. For the day, the index traded in a relatively narrow band between 30,869 pts and 31,060 pts before closing 15 pts softer at 30,959 pts. The past four sessions’ price actions continue to indicate the risk for a deeper correction developing, remaining well contained at this juncture. Towards the downside, a deeper correction may set in if the 30,500-pt support level is breached. Premised on this, we are keeping to 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.

No changes are made to our support levels of 30,500 pts and 30,000 pts psychological level. Similarly, the immediate resistance levels are maintained at 31,000 pts and 31,500 pts.

Source: RHB Securities Research - 14 Jan 2021