Maintain long positions. Despite mild profit-taking in the later part of the session, the E-Mini Dow edged higher on Friday, adding 76 pts to settle at 34,513 pts. It gapped up to start Friday’s session at 34,556 pts. It rose to the day’s high of 34,639 pts, but fell to a low of 34,495 pts before closing at 34,513 pts – forming a bearish candle, as the closing price was lower than the opening. Although it saw mild profit-taking, it managed to close at a two-week high – indicating that the bulls are still in the driver’s seat. As long as the RSI sustains and trends above the 50% level, bullish momentum may resume in coming sessions to lift the index higher. This, coupled with the index displaying a series of “higher highs with higher lows”, shows that the uptrend structure is still intact. As such, we hold on to our positive trading bias.

We recommend traders stick to the long positions initiated at 34,352 pts, or the closing level of 24 May. For risk management purposes, the initial stop-loss is set at 33,700 pts.

The immediate support is revised to 34,170 pts – the low of 27 May – followed by 33,700 pts. On the upside, the immediate resistance is seen at 34,550 pts, followed by 34,700 pts.

Source: RHB Securities Research - 31 May 2021