Maintain long positions. The E-Mini Dow experienced a sharp positive intraday price reversal after testing the support zone, which consists of 29,000 – 28,850 pts, with a low of 28,781 pts, before rebounding to close 271 pts higher at 29,319 pts. While we note that the index’s recent upward move from the 200-day SMA line area has been very sharp, showing early signs of exhaustion during the previous session, in the absence of a clear negative price follow-through – by way of a closing below the 29,000-pt support level – our positive trading bias would continue to stay.

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.

Support levels are maintained at the 29,000-pt round figure, followed by 28,850 pts. Towards the upside, the immediate resistance is set at 29,600 pts, followed by the 30,000-pt psychological level – both were derived from 9 Nov’s candle.

Source: RHB Securities Research - 11 Nov 2020