Maintain long positions. The E-Mini Dow saw a strong rebound yesterday, surging 313 pts to settle at 34,016 pts – and returning back to the 34,000-pt psychological level. Yesterday, the index gapped down to open at 33,692 pts. After reaching the session’s low of 33,625 pts, strong buying interest emerged at the start of the US trading hours. It surged to a high of 34,040 pts and closed at 34,016 pts. From the latest price action, strong support exists at the 33,800-pt and 33,700-pt levels. As the RSI is also clawing its way back to its uptrend line, we expect positive momentum to follow through in coming sessions, and thus, the index may retest its recent record high of 34,144 pts. As the index is shifting back to bullish momentum, we keep our positive trading bias.

We recommend traders stick to the long positions initiated at 31,509 pts, or the closing level of 1 Mar. For risk management purposes, the trailing-stop is set higher at 33,600 pts.

The immediate support is revised to 33,800 pts, followed by the 33,700-pt round figure. On the upside, the immediate resistance is pegged at the 34,050-pt round figure, followed by 16 Apr’s high of 34,144 pts.

Source: RHB Securities Research - 22 Apr 2021