Maintain short positions. The E-Mini Dow attempted to move above the immediate resistance yesterday, but failed to sustain as it recouped all the intraday gains – it settled 4 pts lower at 36,009 pts. The index initially opened positively at 36,059 pts. It then whipsawed with high volatily between the 36,178-pt day high and 35,950-pt day low before closing on a neutral tone below the opening level. The latest session saw the E-Mini Dow reacting negatively below the 36,076-pt immediate resistance where selling interest emerged near that level. This continues to validate the recent “Three Black Crows” bearish pattern – it is expected to fall further towards the 35,777-pt immediate support in the coming sessions, which will lead towards the formation of a “lower high” bearish pattern. As such, we retain our bearish trading bias.

Traders should keep the 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 pegged 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 is maintained at 36,076 pts – the high of 4 Nov – and followed by 36,500 pts.

Source: RHB Securities Research - 16 Nov 2021