Maintain short positions. The E-Mini Dow saw the bullish momentum take a pause yesterday after it hit the resistance level, declining 76 pts to settle at 33,759 pts. Although it started stronger at 33,864 pts, the upward movement was capped at the 33,962-pt day high. It then saw selling pressure, which dragged it towards the 33,752- pt day low before it settled at 33,759 pts. If the bulls manage to lift the index higher in the coming sessions, breaching 33,850 pts, it may potentially direct the E-Mini Dow back to the 50-day SMA line, allowing it to resume its uptrend. Otherwise, the index may re-test the 33,600-pt support. Since the RSI is below the 50% threshold, the momentum remains weak and we are likely to see the E-Mini Dow have another correction in the immediate term. Hence, we maintain our negative trading bias.

Traders should stick to short positions initiated at the closing level of 15 Jun, or 34,177 pts. To manage risks, a trailing-stop threshold is placed at 33,850 pts.

The immediate support is marked at 33,600 pts and, subsequently, 32,902 pts – the low of 21 Jun. The immediate resistance is pegged at 33,850 pts and followed by 34,209 pts, or the high of 16 Jun.

Source: RHB Securities Research - 24 Jun 2021