Depending on Mini Supports >>> Dow at important 7,500 Support Level

A few days ago, we identified mini support levels for the Dow Jones and the KLCI to help the bull scale the proverbial equities mountain.

Now the time has come to see how tough these mini supports really are. Dow Jones : At critical 7.500 Mini support level

Last Thursday, we identified the 7,500 (Uptrend line support) as an important mini support level to help the bulls sustain the Dow’s uptrend.

After correcting a significant 402.5 points in the last two days, the Dow has now reached the 7,500 support. Will this 7,500 support level hold?

No doubt the Dow’s volatility has managed to scare trader’s from all over the world with the massive profit taking in global equities yesterday (Hang Seng down 4.7%, FTSE down 3.5%). However, we think that this 7,500 support will hold and be a platform for the bulls to resume the Dow’s uptrend to assail the challenging 8,000 resistance level ahead.

KLCI : 873 break not a true break
The KLCI yesterday numerically broke through the 873 dynamic MAV support by 4 points when it closed at 869 points yesterday. But we can live with a transgression of 4 points and still not classify it as a true break yet. If the Dow can rebound tonight and drag the KLCI back above this support line, then this 873 dynamic support will still be intact, which means that the KLCI uptrend is still intact.

Strategy : Positive on KLCI and Dow
We maintain our positive view of the KLCI as we think that the KLCI’s 873 support and the Dow’s important 7,500 support level will hold and help the bulls sustain their uptrend. Traders are advised to enter positions in today’s session of weakness.