Maintain long positions. Last Friday, the E-mini Dow charted second consecutive of weak closings, ending the 277 pts lower at 28,074 pts – the low was posted at 27,643 pts. The latest two weak sessions came after the index failed to sustain its marginal breakout from the 29,000-pt mark on the back of an overbought RSI reading recently. Nevertheless, the relatively sharp rebound from the session’s low is suggesting the bulls are still in presence and the risk for a deeper retracement to develop is still contained. This bias would stay provided the 28,000-pt support mark is not breached at the closing. Hence, we are keeping our positive trading bias.

We advise traders to stay in long positions. We initiated these at 26,491 pts, ie the closing level of 14 Jul. For riskmanagement purposes, a stop-loss can now be placed below the 28,000-pt level.

The immediate support is revised to the 28,000-pt round figure. This is followed by 27,643 pts – the latest low. Conversely, the immediate resistance is set at 28,600-pt – slightly above the latest high. Followed by 29,000-pt round figure.

Source: RHB Securities Research - 7 Sept 2020