Maintain long positions. The E-Mini Dow continued its strong rebound above the 50-day average line yesterday, rising 299 pts to settle at 35,641 pts. The index initially began at 35,382 pts. After touching the 35,370-pt session low, it propelled higher towards touching the intraday high of 35,752 pts before retracing moderately at the close. This was in line with our earlier expectation on the buying pressure above the 200-day SMA line reclaiming above the 50-day average line remaining intact. Coupled with the RSI strengthening above the 55% level, the bullish momentum is expected to continue in the coming sessions towards the 36,390-pt next resistance level. With the uptrend reversal being observed, we keep to our positive trading bias.

Traders are advised to 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 remains glued at 35,590 pts – 2 Feb’s high – and followed by 34,800 pts, ie the low of 26 Nov 2021. Meanwhile, the immediate resistance remains unchanged at 36,390 pts, which was 13 Jan’s high. This is followed by 36,832 pts or 5 Jan’s high.

Source: RHB Securities Research - 10 Feb 2022