Maintain long positions. The E-Mini Dow wiped off its strong intraday gains yesterday to close with a negative tone. It settled 24 pts weaker at 35,902 pts – just above the 35,900-pt immediate support. The index had opened on a positive note at 35,936 pts and gradually climbed higher – this saw it touch the intraday high of 36,204 pts during the European trading session. Profit-taking activites then took place to shift the E-Mini Dow’s direction southwards, where it then hit the intraday low of 35,778 pts before rebounding moderately at the close. The black white body candlestick with long upper shadow pictures the bullish momentum taking a pause, and the index is expected to be dragged below the 35,900-pt immediate support in the coming sessions. Nevertheless, the medium-term positive rebound still remains intact, as supported by the RSI maintaining above the 55% level. As such, we stick with our bullish trading bias.

We suggest traders keep to the long positions initiated at 35,212 pts. For risk-management purposes, the initial trailing-stop point is still at 35,383 pts, ie below the 50-day SMA line.

The immediate support is set at 35,900 pts – 26 Nov’s high – and followed by 35,383 pts, or the low of 27 Oct. The immediate resistance levels are pegged at 36,446 pts – 8 Nov’s high – and the 37,000-pt threshold.

Source: RHB Securities Research - 17 Dec 2021