Maintain long positions. The E-Mini Dow saw bullish momentum extend yesterday. At one point, it breached 2021’s high, and went on to touch the session’s high of 34,219 pts. Mild profit-taking sent it lower to close at 34,118 pts. The closing price was higher than the opening price of 34,016 pts, forming a bullish candlestick. The index appears to be forming a “higher low” pattern, reinforcing that the bulls have formed a strong support near 33,700 pts. Although profit-taking activities emerged above the 34,144-pt resistance level, the index may see mild consolidation and retest the upside resistance soon. The RSI indicator is breaking away from the trendline, showing that bullish momentum is picking up. With such a strong technical setup, it is very likely the index will see a new record high. As such, we maintain our positive trading bias.

We recommend traders maintain the long positions initiated at 31,509 pts, or the closing level of 1 Mar. For risk management purposes, the trailing-stop is kept at 33,700 pts.

The immediate support is established at 33,700 pts, followed by the 33,500-pt round figure. On the upside, the immediate resistance is revised to 2021’s high of 34,144 pts, followed by 34,200 pts.

Source: RHB Securities Research - 6 May 2021