Maintain long positions. The E-Mini Dow’s attempt to resume its rebound was met with selling pressure, which appeared during the European trading hours. From a high of 31,609 pts, the index slid to settle 122 pts weaker at 31,236 pts – near its 31,216-pt low. This has weakened our bias for the index to extend its rebound, and retest the recent high of around 32,000 pts, as it indicates lack of positive follow-through after rebounding from the 50-day SMA line. The SMA line is acting as a crucial near-term support level, and if breached, will likely open the door for further weakness. For now, we keep our positive trading bias – until a negative price signal appears.

We recommend traders stay in long positons. We initiated these at 31,509 pts, or the closing level of 1 Mar. For risk management purposes, a stop-loss can be placed below 30,800 pts.

Support levels are maintained at 31,200 pts and 30,800 pts, which is near the 50-day SMA line. Moving up, the immediate resistance is set at 31,637 pts – 1 Mar’s high – and followed by 32,000 pts.

Source: RHB Securities Research - 4 Mar 2021