Keep long positions. After finding its footing on Wednesday, the E-Mini Dow jumped higher yesterday to settle 527 pts stronger at 34,784 pts. The index opened at 34,248 pts and immediately started its intraday rally towards the peak of USD34,853, before retracing mildly to settle at 34,784 pts. The long bullish candlestick printed yesterday confirms the previous session’s “hammer” reversal candlestick that the uptrend reversal has just started – forming a “higher low” bullish structure. This can also be seen by the RSI strength indicator that has improved to above the 50% level yesterday. Hence, we expect the E-mini Dow to chart higher – above the immediate resistance and 50- day average line in the coming sessions – and likely hit the 35,000-pt resistance. As such, we remain with our positive trading bias.

We recommend traders maintain their long positions that 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 unchanged at the 34,000-pt round number, and 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 - 15 Oct 2021