Maintain long positions. After breaching the 36,000-pt level for the first time, the E-Mini Dow experienced mild profit taking yesterday, pulling back 26 pts to settle at 36,009 pts. The index initially started off Thursday’s session at 36,027 pts and moved sideways for most of the session. The bears were eager to take profits early during the start of the US trading hour, dragging the index to touch the session’s low of 35,865 pts. It then rebounded in the late evening, paring the intraday losses to close at 36,009 pts. The latest session saw the bulls not giving up the 36,000-pt threshold as bargain hunting activities emerged near the session’s low. The index may continue drifting sideways for consolidation near the 36,000-pt level before resuming its upward movement. Breaching the 36,076- pt immediate resistance should attract further buying interest. On the other hand, if the bears decide to extend profit taking activites, we expect the resistance-turned-support of the 35,777-pt level to cushion the selling pressure. As of now, we retain our positive trading bias.

Traders should maintain the long positions initiated at 35,800 pts, or at the closing level of 1 Nov. To control the trading risks, the initial stop-loss threshold is placed at 35,383 pts.

The immediate support remains at 35,777 pts (26 Oct’s high), followed by 35,383 pts – 27 Oct’s low. Meanwhile, the immediate resistance is sighted at 36,076 pts – the high of 4 Nov – followed by 36,500 pts.

Source: RHB Securities Research - 5 Nov 2021