Maintain long positions. After recording a fresh all-time high on Monday, the E-Mini Dow took a breather by mildly taking profits yesterday – declining 81 pts to settle at 34,953 pts. After opening at 35,039 pts, the index tracked the weak momentum of its Asian peers, retracing to the 34,762-pt session low. It then bounced off during the late US trading hours, partially paring the losses towards the close. With the RSI rounding down, but still above the 50% level, we expect the bullish momentum to pause in the immediate term before boosting the E-Mini Dow higher towards a new high. We expect the index to move sideways above the 34,652-pt immediate support level in the coming sessions. Since it is trading above the stop-loss point, we stick to our positive trading bias.

Traders are suggested to maintain the long position initiated at 34,709 pts, ie the closing level of 22 Jul. To mitigate trading risks, the stop-loss mark is fixed at 34,557 pts – 22 Jul’s low.

The supports levels are unchanged at 34,652 pts – the low of 26 Jul – and 34,361 pts, or 21 Jul’s low. Meanwhile, the immediate resistance level is pegged at 35,200 pts and, subsequently, at 35,350 pts – both are in uncharted territory.

Source: RHB Securities Research - 28 Jul 2021