Maintain long positions. The E-mini Dow extended its gains into a fourth consecutive session, adding 280 pts to settle at 28,798 pts. This comes after it recently crossed above both the 50-day SMA and multi-week downtrend lines. Additionally, the RSI is picking up and has yet to reach an overbought threshold. Based on the recent price actions, there is a good chance of the index retesting its recent 29,180 pts high. Until price exhaustion signs appear, we are keeping to 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 at the breakeven mark.

Support levels are now eyed at 28,470 pts and 28,150 pts. On the upside, the immediate resistance is set at the 29,000-pt round figure and followed by 29,180 pts – the high of 3 Sep.

Source: RHB Securities Research - 13 Oct 2020