Maintain long positions. The E-mini Dow tested the immediate resistance level of 28,367 pts with a high of 28,452 pts, before ending 131 pts stronger at 28,310 pts. With the index showing a good breakout from both the 50-day SMA and multi-week downtrend lines, prospects for the index to extend its rebound in the coming session remain favourable. The RSI reading, which is trending up, also indicates that the momentum is improving. Hence, we are keeping our positive trading bias.

We recommend traders stay in long positions. We initiated these at 28,179 pts, or the closing level of 7 Oct. For risk-management purposes, a stop-loss can be placed below 27,500 pts.

The immediate support is revised to the 28,000-pt round figure, followed by 27,500 pts, Meanwhile, the immediate resistance is maintained at 28,367 pts, which was the high of 16 Sep, and followed by 28,500 pts.

Source: RHB Securities Research - 9 Oct 2020