Maintain long positions. The E-Mini Dow persisted with its uptrend yesterday after jumping 154 pts to settle at 35,477 pts, as the index attempted to hit its all-time high level. It opened at 35,355 pts and trended lower prior to the US trading session, touching the intraday low at 35,272 pts. It then bounced off strongly to hit the intraday high at 35,541 pts during the mid-US trading session before retracing strongly to close at 35,477 pts. The uptrend continuation that appeared yesterday suggests the bullish momentum is strong enough to move higher while selling pressure is sturdy at the 35,547-pt resistance – its historical high. With the RSI getting strong above the 60% level, we expect the E-mini Dow to print its new high level in the coming sessions. Nevertheless, we do not discount the possibility of mild profit-taking in the coming sessions.Therefore, we keep to our positive trading bias.

We suggest traders keep to the long positions initiated at the closing level of 7 Oct, or 34,638 pts. To manage the trading risks, the initial trailing-stop threshold is set at 34,906 pts.

The immediate support level is pinned at 34,906 pts, or 18 Oct’s low. This is followed by the 34,500-pt round number. On the upside, the immediate resistance is eyed at 35,504 pts, ie the high of 3 Sep. This is followed by 36,000 pts.

Source: RHB Securities Research - 21 Oct 2021