Maintain long positions. The E-Mini Dow saw selling pressure emerging yesterday, falling 149 pts to settle at 34,437 pts. The index opened flat on Wednesday at 34,586 pts. Although it rose to 34,647-pt day high during the early US trading hours, it turned south in second half of the session towards the 34,425-pt day low before settling in at 34,437 pts. If the current selling pressure is further extended, the E-Mini Dow may dip lower to test the 34,310- pt support level. In the event this level gives way, a new “lower low” bearish pattern should form. Otherwise, the index may consolidate above the support level before making a new move. As long as the latter level stays intact, we maintain 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 raised to the low of 3 Jun, ie 34,310 pts.

The immediate support is marked at 34,310 pts, or the low of 3 Jun. This is and followed by 34,170 pts – 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 2021’s high.

Source: RHB Securities Research - 10 Jun 2021