Maintain short positions. The E-Mini Dow saw one of its worst sessions last Friday, plunging 538 pts to settle at 33,155 pts – its worst week in 2021 so far. The index opened flat on Friday, at 33,710 pts. After touching the day’s high of 33,755 pts, it moved sideways until selling pressure kicked-in during the European trading hours, dragging it towards the 33,071-pt day low before rebounding to close at 33,155 pts. With the latest price action, the index is extending the correction that started from 34,825 pts, forming another “lower low” bearish price pattern. As the index is heading into oversold levels, it may see a brief technical rebound in the coming sessions. Expect the index to test the resistance at 33,498 pts. Meanwhile, the bulls may attempt to establish a support level near 33,000 pts. As the bears are still dominant, we are keeping our negative trading bias.

Traders should hold on to their short positions initiated during September’s futures contract – at the closing level of 15 Jun, or 34,177 pts. To manage risks, a trailing-stop is placed at 33,850 pts.

The immediate support is adjusted to the 33,000-pt psychological level, followed by 32,746 pts or the low of 29 Mar. Conversely, the immediate resistance set at 33,498 pts or 17 Jun’s low, followed by 33,755 pts – 18 Jun’s high.

Source: RHB Securities Research - 21 Jun 2021