Maintain long positions. The E-Mini Dow continued its sideways movement for the week last Friday, oscillating within a tight range to decline 142 pts and settle at 34,832 pts. The index opened at 34,978 pts and tapped the day’s high at 34,997 pts before falling lower during the Asian trading hours. It then bounced mildly during the European trading hours. This was short lived, as selling pressure remerged during the US trading hours to drag the E-Mini Dow lower to hit the lowest level during the session – at 34,756 pts – before bouncing off mildly at the close. The latest price movements show the index moving horizontally above the 34,652-pt immediate support. With the RSI getting weaker above the 50% level, the positive momentum may slow down in the coming sessions. If it remains above the stop-loss point, we stick to our positive trading bias.

Traders are advised to retain the long positions initiated at 34,709 pts, or the closing level of 22 Jul. To mitigate the trading risks, the stop-loss level is pegged at 34,557 pts, ie 22 Jul’s low.

The support levels are fixed at 34,652 pts – 26 Jul’s low – and 34,361 pts, or 21 Jul’s low. Meanwhile, the immediate resistance level is marked at the uncharted territory of 35,200 pts and followed by 35,350 pts.

Source: RHB Securities Research - 2 Aug 2021