Still short positions. The E-Mini Dow failed to rebound higher yesterday after writing off most of its strong intraday gains – it settled 52 pts higher at 36,061 pts. The index initially started positively at 36,023 pts before oscillating sideways towards the early European session – it hit the day’s low at 35,946 pts. Buying momentum then emerged to propel the E-Mini Dow towards the 36,238-pt day peak before strong profit-taking took place towards the close at 36,061 pts. The latest candlestick with long upper shadow indicates that the strong selling pressure is imminent – in line with the recent “Three Black Crows” bearish candlestick pattern. Hence, the index is expected to fall further towards the 35,777-pt immediate support in the coming sessions and form a “lower high” bearish pattern. With that in mind, we keep to our bearish trading bias.

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

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

Source: RHB Securities Research - 17 Nov 2021