Keep short positions. The E-Mini Dow denied Monday’s positive momentum yesterday after falling strongly by 620 pts to settle at 34,457 pts. It began mildly higher at 35,132 pts and attempted to climb higher as it touched the 35,234-pt day’s high – just above the 50-day average line – but this was shortlived. Strong selling pressure then emerged following the Asian trading session, which dragged the index southwards towards the close. It hit the day’s bottom at 34,384 pts before rebounding mildly to close. The latest long black candlestick that is moving further away from the 50-day average line indicates the bearish momentum is getting more obvious. Since the E-Mini Dow has breached below the immediate support-turned-resistance of 34,626 pts, it is likely to see the downtrend persisting towards the 200-day SMA line at 34,278 pts – supported by the further weakening of the RSI. Premised on this, we stick to our negative trading bias.

We suggest traders maintain the short positions initiated at 35,992 pts, ie the closing level of 10 Nov. To manage trading risks, the initial trailing-stop point is marked at 35,383 pts – above the 50-day average line.

The immediate support is placed at 33,984 pts, or 13 Oct’s low, and followed by 33,383 pts – 1 Oct’s low. The immediate resistance is lowered to 34,626 pts – 26 Nov’s low – and followed by 35,383 pts, ie 27 Oct’s low.

Source: RHB Securities Research - 1 Dec 2021