Maintain short positions. The E-mini Dow experienced a wide trading range of between 27,039 and 27,904 pts, before settling 256 pts stronger at 27,664 pts. The intraday price actions suggest that the bulls are still struggling to stage a decisive breakout from the multi-week downtrend and 50-day SMA line. While the RSI shows momentum is picking up, we believe further positive price actions are needed in the coming sessions to signal that the index is ready to resume its multi-month upward move. We maintain our negative trading bias.

We recommend traders stay in short positions, and initiated these at 27,525 pts, or the closing level of 8 Sep. For risk-management purposes, a stop-loss can now be placed above the 28,000-pt mark.

The immediate support is revised to 27,450 pts – a price in the latest session. This is followed by the 27,000-pt round figure. The immediate resistance is set at the 28,000-pt round figure, and followed by 28,367 pts, which was the high of 16 Sep.

Source: RHB Securities Research - 1 Oct 2020