Maintain long positions. The E-mini Dow has continued its uptrend momentum, as the index gapped up and opened at 28,378 pts. It briefly traded at a day low of 28,324 pts before rebounding higher towards the day high at 28,570 pts. The E-mini Dow closed near to day high: 28,518 pts. This latest session was 208 pts higher when compared with the previous day’s close. The strong upward momentum was accompanied by an up-trending RSI. Meanwhile, the 50-day SMA line is curving higher, lending support to the bullish trend. Since the index broke past our previous 28,500-pt resistance level, we anticipate a higher resistance – 28,592 pts – which was the high of 4 Sep. With the uptrend intact, 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 marked at the 28,000-pt round figure and followed by 27,500 pts, Meanwhile, the immediate resistance is pegged at 28,592 pts and followed by the 29,000-pt round figure.

Source: RHB Securities Research - 12 Oct 2020