Maintain long positions. The E-Mini Dow experienced a relatively wild ride during the latest session. At one point, the index tested the lower level of the three-week sideways trading range of 31,100-31,500 pts, with a low of 31,103 pts, during the US session’s opening hour. From the said low, it rebounded sharply to close 26 pts higher at 31,492 pts – slightly below the 31,500-pt resistance level. The latest price action validates our bias that the index is merely undergoing a relatively narrow sideways trading range, following its previous sharp upward move. We believe the index is likely to decisively break away from this sideways trading range soon, thus extending its uptrend. 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 below 30,400 pts.

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

Source: RHB Securities Research - 24 Feb 2021