Maintain short positions. The E-Mini Dow rebounded moderately yesterday, climbing 224 pts to close at 35,613 pts – still below the previous day’s high and the immediate resistance. It opened higher at 35,423 pts and whipsawed sideways during the Asian trading session – hitting the intraday low of 35,388 pts. It then rebounded strongly until the end of the session, hitting the day’s peak of 35,681 pts before retracing towards the close at 35,613 pts. The white candlestick formed yesterday showed that buying interest has emerged, following the previous day’s bearish candlestick – albeit moderately, as it has yet to form a “higher high” bullish pattern. We believe buying interest will be short lived, as strong selling pressure is seen below the 35,777-pt immediate resistance, coupled with mild improvement in the RSI strength yesterday. We stick to our negative trading bias, until the stop-loss is triggered.

Traders are advised to stay in the short positions initiated at the closing level of 27 Oct, or 35,389 pts. To manage trading risks, the stop-loss threshold is pegged at 35,777 pts.

The immediate support is fixed at 35,451 pts, or 25 Oct’s low, followed by 34,906 pts, or 18 Oct’s low. On the upside, the immediate resistance is placed at 35,777 pts, before possibly reaching the 36,000-pt level.

Source: RHB Securities Research - 29 Oct 2021