Maintain long positions. The E-Mini Dow continues to experience “Buy the Dips” despite the weak performance across other major indices. For the day, the index erased its earlier losses – the low was recorded at 31,190 pts – to close 33 pts higher at 31,466 pts. We continue to see the latest performance as part of its ongoing sideways trading range, which has been in development over the past three weeks – it is taking place in the 31,150-31,500 pts range. This is deemed as a healthy development for the E-Mini Dow to digest its prior sharp upwards move. The consolidation phase that has developed so far suggests the risk of a deeper correction setting in will still be limited if the 31,000-pts level is not breached to the downside. Hence, we maintain our positive trading bias.

We recommend traders stay in long positions, which were initiated at 30,950 pts, or the closing level of 4 Feb. For risk-management purposes, a stop loss can now be set at the breakeven level.

Support levels are maintained at 31,000 pts and 30,850 pts. On the upside, the immediate resistance is set at 31,500 pts and followed by 31,750 pts.

Source: RHB Securities Research - 23 Feb 2021