Maintain long positions. The E-Mini Dow partially recouped its intraday losses last Friday, closing 7 pts higher at 34,978 pts – rebounding from below to above the 200-day average line. It opened positive at 35,113 pts and climbed upwards to hit the 35,212-pt day high during mid-Asian trading session. However, selling pressure started to emerge to drag the index southwards towards the 34,668-pt day’s low before it bounced moderately to close at 34,978 pts – still below the opening level. The session’s bearish candlestick with strong intraday is in line with our expectation for profit-taking to happen between the 50- and 200-day average lines before the E-Mini Dow propels northwards. We expect the index to oscillate between 35,590 pts and 34,800 pts in the coming sessions. Since the bullish momentum remains intact above the 34,800-pt support, we stick to a positive trading bias.

Traders should hold on to the long positions initiated at 34,997 pts or the closing level of 31 Jan. For riskmanagement purposes, the stop-loss threshold is set at 34,800 pts.

The immediate support is pegged at 34,800 pts and followed by 33,928 pts, ie 1 Dec 2020’s low. The immediate resistance is revised higher to 35,590 pts – 2 Feb’s high – and followed by 36,390 pts, which was 13 Jan’s high.

Source: RHB Securities Research - 7 Feb 2022