Maintain short positions. The E-Mini Dow saw selling pressure tapering last Friday while it pulled back towards the immediate support. It rebounded 184 pts to close at 36,013 pts. The index initially opened higher at 35,870 pts. After it found the 35,839-pt intraday low, it climbed higher to test the 36,062-pt intraday high before closing at 36,013 pts. The latest session saw the E-Mini Dow reacting positively towards the 35,777-pt immediate support where buying interest emerged near the resistance-turned-support level. Amidst this renewed momentum, the index should travel higher to test its immediate resistance pegged at 36,076 pts. Breaching this hurdle will attract further buying interest and lift it higher. Conversely, there is a possibility that the latest momentum may not sustain and lead the E-Mini Dow to resume its downward movement. As the index is trading below the stop loss and has yet to chart a “higher high”, we think the downside correction risk remains. Hence, we retain our bearish trading bias.

Traders should hold on short positions initiated at 35,992 pts, ie the closing level of 10 Nov. To mitigate the trading risks, the initial stop-loss threshold is set at 36,500 pts.

The immediate support remains at 35,777 pts – 26 Oct’s high – and is followed by 35,383 pts, or 27 Oct’s low. Conversely, the nearest resistance stays at 36,076 pts – the high of 4 Nov – and is followed by 36,500 pts.

Source: RHB Securities Research - 15 Nov 2021