Moving down the stop-loss while keeping short positions. The E-Mini Dow extended its rebound for the second consecutive session, off the recent low of 29,552 pts. The intraday price performance was encouraging, with the index generally moving higher, and recording a high of 30,738 pts before ending at 30,586 pts – representing a gain of 476 pts. In the process, the E-Mini Dow also recaptured the 50-day SMA line. While, we are keeping our bias that the index is developing some form of a correction phase – expecting it to retreat towards the 29,000-pt area – if there are further positive price actions in the coming sessions, such as an upside breach of the latest high of 30,738 pts, our negative trading bias would be cancelled.

We recommend traders stay in short positions. We initiated these at 30,110 pts – the closing level of 1 Feb. For risk management purposes, a stop-loss can be set above 30,738 pts.

Immediate support is now set at 30,300 pts, followed by the 30,000-pt psychological level. Conversely, the immediate resistance is now set at 30,738 pts, which is the latest high, followed by 30,850 pts.

Source: RHB Securities Research - 3 Feb 2021