Remain in short positions. The E-Mini Dow fell strongly yesterday, which saw it closing 620 pts weaker at 34,231 pts. The index began the session at 34,842 pts and touched the intraday high of 34,910 pts before swiftly changing direction southwards. It fell sharply until the end of the session, hitting the day’s bottom of 34,171 pts before the close. The long black candlestick printed yesterday has ignited the bearish momentum following the recent “lower high” bearish structure below the 200-day average line. Coupled with the RSI weakening below the 40% level, we believe the bears will dominate the E-Mini Dow in the coming sessions. We will likely see the index continuing to fall towards hitting the immediate support level of 33,928 pts. Therefore, we stick to our bearish trading bias.

We suggest traders maintain the short positions initiated at the closing level of 11 Feb, ie 34,627 pts. For riskmanagement purposes, the stop-loss threshold is pegged at 34,968 pts.

The first support is revised lower to 33,928 pts or the low of 1 Dec 2021. This is followed by 33,031 pts, which was 24 Jan’s low. Conversely, the resistance levels are revised to 34,800 pts and then 34,968 pts, ie 15 Feb’s high.

Source: RHB Securities Research - 18 Feb 2022