Maintain long positions. The E-Mini Dow snapped five consecutive positive sessions, declining 18 pts to settle at 34,668 pts. Following the recent rally, it opened Monday’s session stronger at 34,722 pts. During the US trading hours, it rose to the session’s high of 35,000 pts. However, bullish momentum faltered later in the session, where it retraced towards the session’s low of 34,611 pts and closed at 34,668 pts – forming a bearish Shooting Star pattern. If negative momentum follows through in the coming sessions, and it breaches 34,550 pts, sentiment may turn risk-off. However, if it moves sideways and consolidates, bullish momentum may return to retest the 35,000-pt psychological level. To protect against risks of further correction, we move the trailing-stop higher while keeping 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, the trailing-stop is raised to 34,550 pts.

The immediate support is revised to 34,550 pts, followed by 34,350 pts. On the upside, the immediate resistance is kept at 34,700 pts, followed by 34,850 pts.

Source: RHB Securities Research - 11 May 2021