Maintain long positions. The E-Mini Dow surged 324 pts yesterday to settle at 34,442 pts – setting a new record high. The index started Thursday’s session at 34,125 pts. It moved sideways for the most of the session and dipped to the day’s low of 34,074 pts. Strong buying interest emerged during the last US trading hour, lifting the index towards the day’s high of 34,458 pts. As the index is treading into uncharted territory, the bears may trim positions and take profit. However, as strong bullish momentum is underway, we think the correction will be shallow, and the index will continue to move higher to test the next resistance at 34,550 pts, followed by 34,700 pts. While riding on the upward momentum, we adjust the trailing-stop higher and stick to a 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, the trailing-stop is raised to 34,050 pts.

The immediate support is marked at 34,150 pts, followed by 33,700 pts. On the upside, the immediate resistance is revised to 34,550 pts, followed by 34,700 pts.

Source: RHB Securities Research - 7 May 2021