Maintain long positions. The E-Mini Dow attempted to continue its uptrend yesterday, but this proved shortlived after strong profit-taking held on from the intraday high towards the close. It settled 24 pts higher at 35,644 pts. The index started positive at 35,641 pts and oscillated between the intraday high and low of 35,777 and 35,618 during the session – it dived from the peak during the US trading session towards the bottom before the close. The latest “Shooting Star” bearish reversal candlestick signals that the bears are eager to take profits in the coming sessions. Nevertheless, the technical leading RSI indicator has yet to show weakness of strength yesterday, giving an indication that the medium-term positive bias remains intact. Unless the E-Mini Dow falls below the revised trailingstop level, we stick to our positive trading bias.

We recommend traders maintain the long positions initiated at the closing level of 7 Oct, or 34,638 pts. To manage the trading risks, the trailing-stop threshold is revised higher to 35,618 pts.

The immediate support level is revised at 35,618 pts, or 26 Oct’s low. This is followed by 35,451 pts, ie 25 Oct’s low. On the upside, the immediate resistance is pegged at 36,000 pts before possibly hitting the 36,500-pt level.

Source: RHB Securities Research - 27 Oct 2021