Maintain short positions. The E-Mini Dow continued its four consecutive sessions of downward movements yesterday, which saw the index closing 142 pts lower at 34,870 pts – it pared all the intraday gains and closed below the 50-day SMA line. The E-Mini Dow began at 35,009 pts, and whipsawed between 34,776 pts and 35,192 pts, with strong selling pressure emerging from the peak to close near the lowest point. The black body candlestick with long upper shadow signifies a bearish momentum below the average line. With the further weakening of the RSI below the 45% level, the odds are high that selling pressure may continue towards the immediate support of 34,569 pts. As such, we retain our negative trading bias until the momentum reverses.

We suggest traders stay in the short positions initiated at the closing level of 7 Sep, or 35,091 pts. To manage risks, the initial stop-loss threshold is marked above 35,547 pts.

The immediate support is fixed at 34,569 pts – 20 Aug’s low – and followed by 33,623 pts, or 19 Jul’s low. The resistance levels are unchanged at 35,114 pts, ie 27 Aug’s low, and 35,547 pts, which was 16 Aug’s high.

Source: RHB Securities Research - 10 Sept 2021