Maintain long positions. The E-Mini Dow successfully breached above the 50-day SMA line during the latest trade, after failing to do so in the prior session. The index ranged between 27,648 pts and 28,390 pts, before ending 562 pts stronger at 28,297 pts. Towards the upside, the 28,550-pt threshold, located near the resistance line (as drawn in the chart) – which stretched from early-September’s high – is the next significant resistance level. Price actions around this level are crucial in signalling the index’s next price directional index. For now, we are keeping our positive trading bias.

We recommend traders stay in long positions. We initiated these at 27,376 pts – the closing level of 3 Nov. To manage risks, a stop-loss can now be placed below 27,648 pts.

The immediate support is revised to the 28,000-pt round figure, followed by 27,800-pt – a level currently located near the 50-day SMA line. Meanwhile, the overhead resistance is pegged at 28,550 pts, followed by 12 Oct’s high of 28,846 pts.

Source: RHB Securities Research - 6 Nov 2020