Maintain long positions while moving up the trailing-stop. The E-Mini Dow reached a record high – the 30,000- pt psychological level – before sliding back to settle 844 pts higher at 29,048 pts. While the index ended the session higher, the sharp reversal from the intraday high of 952 pts suggests that the E-mini Dow’s past 1.5-week strong rebound off the 200-day SMA line – which has accumulated a 4,047-pt gain – is showing signs of exhaustion. Should this be confirmed in the coming sessions by a downside breach of the 29,000-pt support mark, this should open the door for a deeper correction phase setting in. For now, we are keeping to our positive trading bias.

We recommend traders stay in long positions. We initiated these at 27,376 pts, or the closing level of 3 Nov. To manage risks, a stop-loss can now be placed below 29,000 pts.

The support level is revised to the 29,000-pt round figure and followed by 28,850 pts. Moving up, the overhead resistance is now eyed at 29,600 pts and followed by the 30,000-pt psychological level – both were derived from the latest candle.

Source: RHB Securities Research - 10 Nov 2020