Maintain long positions. Despite moving in a tight range yesterday, the E-Mini Dow extended its winning streak to record a fourth consecutive positive session. It started Wednesday’s session at 34,561 pts, oscillating between 34,694 pts and 34,484 pts before settling at 34,590 pts. Yesterday, it managed to record a “higher low” price pattern, showing that the buying pressure is greater than the selling pressure. As long as the balance of strength remains tilted towards the bulls, the index will climb higher to test the immediate resistance of 34,700 pts, and eventually retest the 35,000-pt level, which is the high of 2021. With the RSI still trending higher – showing bullish momentum is intact – we stick to our positive trading bias.

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

The immediate support is set at 34,170 pts, or the low of 27 May, followed by 33,700 pts. Meanwhile, the immediate resistance is pegged at 34,700 pts, followed by 35,000 pts – the high of 2021.

Source: RHB Securities Research - 3 Jun 2021