Maintain short positions. The E-Mini Dow did not follow-through with Thursday’s positive price reaction from the 50-day SMA line. After reaching a high of 28,392 pts, the index slid to settle 79 pts lower at 28,189 pts. The inability of the index to stage a positive price follow-through indicates that there is still lack of technical evidence to show the bulls have regained control over the index’s price trend. Towards the downside, should the abovementioned SMA line be breached in the coming sessions, this would increase the likelihood of the index retracing further. Hence, we are keeping our negative trading bias.

We recommend traders stay in short positions. We initiated these at 28,100 pts, which was the closing level of 19 Oct. To manage risks, a stop-loss can be placed above 28,700 pts.

We maintain the immediate support level at the 28,000-pt round figure, which is also near 15 Oct’s low. This is followed by 27,500 pts. Conversely, the immediate resistance is set at the 28,500-pt mark, followed by 28,700 pts, which was a price point on 16 Oct

Source: RHB Securities Research - 26 Oct 2020