Trailing-stop triggered; initiate long positions. The E-Mini Dow continued its bullish reversal yesterday, rising 515 pts to settle at 34,644 pts – breaching above the 34,499-pt immediate resistance, which was also the trailingstop. It opened mildly positive at 33,153 pts, and continued its upward movement until the end of the session – it touched the day’s peak of 34,749 pts before retracing mildly to close. The long white candlestick printed yesterday shows follow-through bullish momentum from the recent rebound. This has reversed the recent bearish bias to a positive bias – showing that the bulls are in the driver’s seat. The recent sharp increase in the RSI’s strength, from 30% to close to the 50% level, indicates that bullish momentum is getting stronger, and is expected to persist in the coming sessions. As the trailing-stop was triggered, we shift to a positive trading bias.

We closed out the short positions initiated at 35,091 pts, or the close of 7 Sep, after the 34,499-pt trailing stop was triggered. Conversely, we initiate long positions at the closing level of 23 Sep, or 34,644 pts. To manage risks, the initial stop-loss threshold is placed at the 33,623-pt support level.

The immediate support level is adjusted to 34,499 pts or 15 Sep’s low, followed by 33,623 pts – 19 Jul’s low. The resistance levels are set at 35,114 pts, or 27 Aug’s low, and 35,547 pts, which was 16 Aug’s high.

Source: RHB Securities Research - 24 Sept 2021