Maintain long positions. The E-Mini Dow continued to trade in negative tone yesterday as it fell strongly by 226 pts to settle at 35,675.79 pts – further below the 35,900-pt immediate resistance. Last Friday, the index opened on a positive note at 35,958 pts and oscillated sideways before moving downwards ahead of the US trading session – which saw it first touch the intraday high of 35,978 pts, and then the day’s low of 35,650 pts before the close. The long black body candlestick shows the presence of the bearish momentum following Thursday’s recent bullish momentum pause – in line with our earlier note – which may drag further towards the 35,383-pt revised immediate support in the coming sessions. Nevertheless, the medium term positive rebound remains intact, as supported by the RSI that is still hovering above the 50% level and also trading above the 50-day SMA line. Until the trailing-stop is triggered, we keep to 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 revised to 35,383 pts – 27 Nov’s low –followed by 34,986 pts, or the high of 1 Dec. The immediate resistance levels are set at 35,900 pts (26 Nov’s high), and 36,446 pts, 8 Nov’s high.

Source: RHB Securities Research - 20 Dec 2021