Maintain short positions. The E-Mini Dow snapped six consecutive sessions of losses, surging 606 pts to settle at 33,761 pts – registering its best session in 2021. Following the quadruple witching that happened last Friday, the index started Monday’s session weaker at 33,072 pts. After touching the 32,902-pt day low, it started to change its course by moving higher, breaching the 33,000-pt mark to reach the day high of 33,808 pts. The E-Mini Dow concluded the session at 33,761 pts by printing a bullish candlestick pattern. If the current bullish momentum follows through, the index may cross above the 33,808-pt immediate resistance to see a change of sentiment. At this juncture, strong support formed at the 32,902-pt level yesterday. Although it experienced a strong reversal yesterday, we hold on to our negative trading bias until the trailing stop is breached.

We suggest traders stick to their short positions initiated at the closing level of 15 Jun, or 34,177 pts. To manage the risks, a trailing-stop threshold is fixed at 33,850 pts.

The immediate support is adjusted to the 33,498 pts – the low of 17 Jun – and followed by 32,902 pts, or the low of 21 Jun. The immediate resistance is revised to the 33,808 pts – the high of 21 Jun – and followed by 34,209 pts, ie the high of 16 Jun.

Source: RHB Securities Research - 22 Jun 2021