Maintain long positions. Following a strong display last Friday, the E-Mini Dow pulled back yesterday on profit taking, retracing 126 pts to settle at 34,616 pts, ie a level above Friday’s session low. The index started Monday at 34,760 pts and moved sideways for most of the session. Although the bullish momentum set in during the US trading hours – lifting it to test near the 34,825-pt day high – the momentum faltered during the late session and fell to the day low of 34,558 pts before closing at 34,616 pts. Since the E-Mini Dow managed to sustain above the 34,310-pt support level, the uptrend structure of the “higher low” was deemed intact. If the index regains momentum in the coming sessions, it may climb higher to re-test 2021’s high, or the recent high of 34,825 pts. As long as it still demonstrates a series of “higher highs and higher lows”, we keep to our positive trading bias.

We recommend traders maintain the long positions initiated at 34,352 pts, or the closing level of 24 May. For risk management purposes, the stop-loss threshold is set at 34,170 pts.

The immediate support is unchanged at 34,310 pts – the low of 3 Jun – and followed by 34,170 pts, or the low of 27 May. The immediate resistance is sighted at 34,825 pts, ie 7 Jun’s high, and followed by 35,000 pts, which was the 2021’s high.

Source: RHB Securities Research - 8 Jun 2021