Maintain short positions. The E-Mini Dow is still facing downward pressure, despite rebounding from the 35,777- pt immediate support – it fell 56 pts to settle at 35,811 pts. The index gapped down to open at 35,841 pts, and staged a brief rebound early in the session, testing the 35,961-pt session high. It switched directions during the US trading session, resulting in the index falling to the 35,593-pt session low before paring its intraday losses to close at 35,811 pts. Since touching the all-time high of 36,446 pts on 8 Nov, the index has been trending downwards on “lower highs and lower lows”. As the RSI is heading lower, it is very likely that negative momentum will follow through and drag the index down. In the event that it breaches the 35,777-pt support level, the next strong support could be found near 35,383 pts. Until it forms a fresh “higher high”, we keep to our bearish trading bias.

Traders should stick with the short positions initiated at 35,992 pts or the closing level of 10 Nov. For risk management, the stop-loss threshold is revised to 36,200 pts from 36,500 pts.

The immediate support stays at 35,777 pts – 26 Oct’s high – followed by 35,383 pts, or 27 Oct’s low. Meanwhile, the immediate resistance is seen at 36,076 pts – 4 Nov’s high – followed by 36,446 pts (8 Nov’s high).

Source: RHB Securities Research - 19 Nov 2021