Maintain long positions. The E-Mini Dow extended its gains into the fifth consecutive session, but at a slower pace. It closed 92 pts higher at 31,042, as the trading range narrowed to between 30,924-31,149 pts. This happened as the index is moving towards its historical high of 31,188 pts. Given the sharp gains in recent sessions, from 1 Feb’s low of 29,522 pts, the possibility of the index developing a minor pause in the coming sessions cannot be discounted. However, the risk of a potential consolidation phase, in the form of a deep retracement, is still low, as long as the 30,000-pt psychological level is not breached. Premised on this, we keep our positive trading bias.

We recommend traders stay in long positions. These were initiated at 30,950 pts – the closing level of 4 Feb. For risk management, a stop-loss can be set below 30,000 pts.

Support levels are eyed at 30,850 pts, followed by 30,500 pts. On the upside, immediate resistance is set at 31,188 pts – the record high posted on 21 Jan – followed by 31,500 pts.

Source: RHB Securities Research - 8 Feb 2021