Maintain short positions. The E-Mini Dow experienced a highly volatile intraday session yesterday, where it settled 12 pts lower at 34,043 pts amidst a mix of strong selling and buying pressure during the day. It opened positive at 34,071 pts before whipsawing between the 33,532-pt day low and 34,658-pt day high throughout the session. The E-Mini Dow retraced strongly from the day’s high before rebounding mildly towards the close, ie slightly below the opening. The session’s small black body candlestick with both long upper and lower shadow shows the momentum uncertainty near the support level. Nevertheless, since a weakening of the RSI still persists below the 30% level, we expect the bearish momentum to persevere in the medium term. As such, we keep to our negative trading bias until the trailing-stop mark is triggered.

We advise traders to hold on to the short positions initiated at the closing level of 7 Jan, ie 36,107 pts. For risk management, the trailing-stop threshold is set at 34,800 pts.

The immediate support stays at 33,928 pts – 1 Dec 2021’s low – while the lower support is marked at 33,031 pts or 24 Jan’s low. The immediate resistance is pegged at 34,800 pts and followed by 35,430 pts, ie 19 Jan’s high.

Source: RHB Securities Research - 28 Jan 2022