Maintain long positions. The E-Mini Dow saw extended selling pressure yesterday, falling 255 pts to settle at 33,703 pts. It started Tuesday’s session at 33,996 pts – crossing the 34,000-pt psychological level to reach the session’s high at 34,066 pts. Selling pressure intensified after the European trading hour started, dragging the index to the session’s low of 33,572 pts. Bargain hunting by the bulls lifted the index to close at 33,703 pts. Although the index ended with two consecutive bearish sessions, the main trend still shows a typical bullish pattern of “higher highs with higher lows”. The index may consolidate and retest the support level near to 33,572 pts. Meanwhile, breaching 33,400 pts may see a downward movement towards the 50-day SMA line. Since the stop loss remains intact, we stick to our positive trading bias.

We recommend traders maintain long positions initiated at 31,509 pts, or the closing level of 1 Mar. For risk management purposes, the trailing stop is placed at 33,400 pts.

The immediate support is revised to 20 Apr’s low of 33,572 pts, followed by the round figure of 33,400 pts. On the upside, the immediate resistance is pegged at 15 Apr’s close of 33,923 pts, followed by 16 Apr’s high of 34,144 pts.

Source: RHB Securities Research - 21 Apr 2021