Maintain short positions. The E-Mini Dow pared down its intraday gains last Friday, with the index falling 52.2 pts to settle at 34,696.8 pts – moving further away from the 50-day SMA line and heading towards the immediate support level. It began at 34,743 pts and whipsawed in a downward pattern throughout the session – it hit the day’s peak at 34,838 pts during Asia’s trading sessions before swiftly changing direction towards south to hit the day’s bottom at 34,665 pts before close. The black body candlestick with a long upper shadow shows that selling pressure beneath the average line is getting more obvious – this signifies a bearish medium-term outlook. Backed by the weakening RSI pointing lower below the 45% level last Friday, we keep to our bearish trading bias.

We suggest traders to maintain their short positions, initiated at the closing level of 7 Sep, or 35,091 pts. To manage risks, the stop-loss threshold is pegged at 35,114 pts – the nearest resistance.

The immediate support level is unchanged at 34,569 pts, or 20 Aug’s low, followed by 33,623 pts, ie 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 - 20 Sept 2021