Maintain short positions. The E-Mini Dow continued the strong rebound yesterday as it rose 251 pts to close at 35,632 pts, crossing above the 50-day SMA line. It opened higher at 35,405 pts and then moved sideways before whipsawing during the European trading session, which saw it touch the day’s low of 35,286 pts. Buying momentum then kicked in during early US trading session to propel northwards by hitting the intraday high of 35,662 pts before the close. The long white body candlestick that printed for two consecutive sessions is in line with the immediate term bullish momentum towards the 35,900-pt resistance. However, the medium term outlook remains bearish unless the 35,900-pt resistance is breached. With the improving RSI strength above the 52% level, the odds for the E-Mini Dow to go beyond the immediate resistance is likely to happen. Until the stop-loss is triggered, we keep to our bearish trading bias.

Traders are suggested to keep the short positions initiated at the closing level of 20 Dec at 34,813 pts. For risk-management purposes, the initial stop-loss threshold is set at 35,900 pts.

The immediate support is revised to 35,383 pts (27 Nov’s low), followed by 34,547 pts – 20 Dec’s low. The immediate resistance levels are adjusted to 35,900 pts (26 Nov’s high), and 36,446 pts (8 Nov’s high).

Source: RHB Securities Research - 23 Dec 2021