Maintain short positions. After a mild consolidation, the E-Mini Dow saw the bullish momentum picking up pace last Friday, jumping 242 pts to settle at 34,951 pts – recording a positive close for the week. It initially started the session at 34,768 pts. After it recorded a 34,739-pt session low, the bullish momentum then accelerated during the European trading hours, rising to test the 34,993-pt session high. It closed at 34,951 pts, just 49 pts shy of the 35,000-pt psychological level. With the bullish momentum garnering strength, the index may test its 2021 high at 35,000 pts. Breaching this level will see the E-Mini Dow is heading into uncharted territory, traveling higher towards the next hurdle at 35,200 pts. On the downside, 34,557 pts will provide a comfortable support on the uptrend. Premised on the strong recent momentum, we are keeping to our positive trading bias.

We recommend traders shift to the long position initiated at 34,709 pts, or the closing level of 22 Jul. To control the trading risks, an initial stop-loss threshold is placed beneath the 50-day SMA line at 34,250 pts.

The immediate support is revised to 34,557 pts – the low of 22 Jul – and followed by the 34,000-pt round number. On the upside, the nearest resistance level is eyed at 35,000 pts – the high of 2021 – and followed by 35,200 pts, a level in uncharted territory

Source: RHB Securities Research - 26 Jul 2021