Still long positions. The E-Mini Dow pared its intraday losses to close on a neutral tone yesterday, down 3pts to 34,257 pts. The index opened lower at 34,190 pts and whipsawed to touch the day’s peak at 34,343 pts and then the day’s bottom at 33,984 pts before bouncing off strongly towards the opening level to close. The latest bullish candlestick with the long lower shadow indicates strong buying momentum above the immediate support level of 34,000 pts. Since the RSI strength is still hovering slightly below the 50% level, we expect an improvement of strength in the immediate sessions to lift the E-Mini Dow towards the immediate resistance. We are of view that the index has found its footing at the immediate support level yesterday. Hence, we maintain our positive trading bias, unless the stop-loss is breached.

We recommend traders keep to their long positions we initiated at the closing level of 7 Oct, or 34,638 pts. To manage the trading risks, the initial stop-loss threshold is pegged at the 34,000-pt level.

The nearest support level is fixed at the 34,000-pt round number, and is followed by 33,383 pts, ie 1 Oct’s low. The immediate resistance is set at 34,800 pts, followed by the 35,000-pt psychological level.

Source: RHB Securities Research - 14 Oct 2021