Maintain long positions. The E-Mini Dow’s selling pressure continued yesterday, falling 168 pts to close at 36,123 pts as it attempted to break the 36,113-pt immediate support, or its stop-loss level. It opened at 36,309 pts, then whipsawed in a volatile fashion throughout the session. Initially, it dragged lower then bounced off towards hitting the intraday high of 36,418 pts. However, strong selling interest emerged during the early US trading session, which saw it fall sharply to hit the session’s low of 36,074 pts before the close. The latest “black Marubozu” candlestick, occurring on the second consecutive day, signifies selling pressure is becoming more obvious, capped at the immediate support of 36,113 pts – this is in line with our earlier expectations that upheld the medium-term bullish structure. However, if the support is breached, the medium-term bullish structure would turn bearish and bring the index below the 50-day average line. Until the stop-loss is breached, we stick to our positive trading bias.

Traders are recommended to keep the long positions initiated at 36,455 pts – the closing level of 3 Jan. For riskmanagement purposes, the stop-loss is set at 36,113 pts.

The immediate support is pegged at 36,113 pts, or 28 Dec 2021’s low, followed by 35,900 pts (26 Nov 2021’s high). Towards the upside, the nearest resistance is at 36,572 pts (30 Dec 2021’s high), followed by 37,000 pts.

Source: RHB Securities Research - 7 Jan 2022