Maintain long positions. After recovering the bulk of its losses during the early session, the E-Mini Dow recorded a minor loss yesterday, declining 23 pts to settle at 34,567 pts. After the index opened at 34,595 pts, it tracked the weakness of its regional peers, falling to the 34,310-pt session low. However, bargain hunting was spotted during the US trading hours, where the E-Mini Dow rebounded from its low to close at 34,567 pts. This showed that the bulls remained active despite the mild selling pressure arising near the 34,694-pt resistance level. As long as the RSI continues to stay above the 50% threshold, the index may climb higher to re-test the resistance again in the near future. As it still trades above the support levels, showing that the “higher low” bullish formation remains intact, we retain 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 stop-loss threshold is placed at 34,170 pts.

The immediate support is revised to 34,310 pts, or the low of 3 Jun – this is followed by 34,170 pts, ie the low of 27 May. The immediate resistance is pegged at 34,694 pts – 2 Jun’s high – followed by 35,000 pts, which was the high of 2021.

Source: RHB Securities Research - 4 Jun 2021