Maintain short positions. The E-Mini Dow saw the bullish momentum extend for a second consecutive session, lifting the index 74 pts higher to settle at 33,835 pts. It initially started Tuesday’s session stronger at 33,812 pts. Mild profit-taking during the early session dragged the E-Mini Dow to touch the 33,627-pt session low. It rebounded during the US trading session to reach 33,926 pts and closed at 33,835 pts. Although it rose higher, the bullish momentum was not strong enough to breach the immediate resistance of 33,850 pts. If the index crosses above this resistance, we expect a “higher high” pattern to form. The bears may be prone to taking profit near the resistance level. As long as the 33,850-pt mark stays intact, we maintain our negative trading bias.

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

The immediate support is adjusted to 33,600 pts and, subsequently, 32,902 pts – the low of 21 Jun. The immediate resistance is revised to 33,850 pts and followed by 34,209 pts, ie the high of 16 Jun.

Source: RHB Securities Research - 23 Jun 2021