• Review: Last Friday, the Dow mini futures tumbled as much as 143 pts to 17965 following the release of disappointing earnings outlook from GE and AMD. However, the losses were reduced to only 42 pts to end at 18066 as better-than-expected earnings from Microsoft and McDonal d’s coupled with multibillions M&A deals from BAT/Reynold and AT&T/Time Warner which boosted investors’ sentiment.

• Despite the drop, the Dow mini managed to inch up 7 pts wow after fluctuating within 18178 and 17965 in a volatile trade during last week, as investors dissecting the ongoing mixed reporting season, prospects of a rate increase by the Fed and tumult wrought by the U.S. presidential election on 8 Nov.

• Weekly outlook. This week, we expect the Dow mini to mirror last week trading pattern, with rangebound band within 17950-17180 levels. A decisive breakout above key downtrend resistance of 17178 (21 Oct high) will spur index higher top retest 18248 (50% FR) to 18337 (61.8% FR) zones. Failure to do so will witness the index to continue consolidating with key supports at 17965 and 17868 (13 Oct low).

Source: Hong Leong Investment Bank Research - 24 Oct 2016