Maintain short positions. The E-Mini Dow fell further away from the 50-day SMA line last Friday, which saw the index settling 263 pts lower at 34,607 pts. It pared all the intraday gains again, closing near the immediate support. The E-Mini Dow opened at 34,872 pts and gradually moved upwards to hit the day’s peak at 35,113 pts before strong selling pressure swiftly kicked in. During the early US trading sessions, the index then moved downwards towards the day’s bottom at 34,598 pts before the close. The long black body candlestick with long upper shadow implies that the selling pressure below the average line was getting more obvious – heading towards breaching the immediate support. The accelerating weakening of the RSI breaching below the 40% level has increased the odds of the E-Mini Dow breaching the 34,569-pt immediate support. Unless the momentum reverses, we stick with our bearish trading bias.

We recommend traders remain with the short positions initiated at the closing level of 7 Sep, or 35,091 pts. To manage risks, the stop-loss level is lowered to 35,114 pts, ie the immediate resistance.

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

Source: RHB Securities Research - 13 Sept 2021