Maintain short positions. The E-Mini Dow failed to stage a strong upside rebound yesterday, merely adding 22 pts to settle at 35,571 pts. After opening at 35,592 pts, the index moved sideways during the first half of the session. When the US trading session began, strong buying interest emerged, lifting it towards the 35,880-pt session high. However, at the 11th hour, the bulls gave up the bulk of the intraday gains and retraced to the 35,530-pt session low before closing at 35,571 pts – as such, the support-turned-resistance of 35,777 pts remains intact while the EMini Dow formed a fresh “lower high” bearish pattern. As long as the key resistance stays intact, the index will resort to downward movements until selling pressures subside. As of now, the E-Mini Dow is still under a correction phase. Hence, we keep to our bearish trading bias.

Traders are advised to hold on to the short positions initiated at 35,992 pts or the closing level of 10 Nov. To limit the trading risk, the stop-loss threshold is placed at 35,900 pts.

The immediate support remains at 35,383 pts – 27 Oct’s low – and is followed by the 35,000-pt round figure. The immediate resistance stays at 35,777 pts – 26 Oct’s high – and is followed by 36,105 pts, ie the high of 17 Nov.

Source: RHB Securities Research - 23 Nov 2021