Maintain long positions. The E-Mini-Dow experienced a negative intraday price reversal after failing to sustain its breakout from the 33,000-pt resistance level. It hit a high of 33,233 pts during the US trading hours, before taking a 180 degree turn to close 137 pts weaker at 32,880 pts. However, it is still too early to conclude that the failure to sustain the breakout, from the said resistance level, is an opening for a correction phase to set in – further negative price signals are required. On the daily chart, a deeper correction may only set in if the 32,000-pt support level fails to hold. For now, we are keeping our positive trading bias.

We recommend traders stay in long positions. 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 32,000 pts.

Support levels are pegged at 32,500 pts and 32,000 pts. Conversely, the immediate resistance is maintained at the round figure of 33,000 pts, followed by 33,300 pts.

Source: RHB Securities Research - 19 Mar 2021