Maintain long positions. The E-mini Dow ended the latest session 171 pts weaker at 28,414 pts, after it swung between a low and high of 28,343 pts and 28,726 pts. We see the second consecutive weak closing as an indication that the index is developing a minor consolidation following its recent gains above the 50-day SMA line – and we have yet to spot any clear trend exhaustion or reversal signals. Based on the past three sessions’ price actions, we believe should the latest low of 28,343 pts be breached in the coming sessions, this would likely suggest a deeper correction phase may be kicking in. Pending this, 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 at below 28,343 pts.

Support levels are now expected to emerge at 28,343 pts – the latest low, followed by 28,150 pts. Meanwhile, the immediate resistance is now eyed at 28,846 pts – the high of 12 Oct. This is followed by the 29,000-pt round figure.

Source: RHB Securities Research - 15 Oct 2020