Maintain short positions, with a new trailing-stop set above the 24,840-pt level. The E-mini Dow ended higher to form a white candle last Friday. It rose 212 pts to close at 24,629 pts, off its high of 24,679 pts and low of 24,419 pts. Still, the appearance of last Friday?s white candle may be experiencing a technical rebound after losses seen over the past two weeks. As the index failed to recoup losses from 29 May„s long black candle, this implies that the near-term negative sentiment stays intact. Overall, we remain negative on the E-mini Dow?s nearterm outlook.

Based on the daily chart, the immediate resistance is now seen at 24,840 pts, situated at the high of 29 May?s long black candle. The next resistance would likely be at 25,510 pts, which was the high of 12 Mar. To the downside, the immediate support is anticipated at 24,227 pts, ie the low of 29 May. If this level is taken out, look to 23,467 pts – determined from the previous low of 3 May – as the next support.

Therefore, we advise traders to maintain short positions, following our recommendation to initiate short below the 24,600-pt level on 30 May. For now, a new trailing-stop can be set above the 24,840-pt threshold in order to limit the risk per trade.

Source: RHB Securities Research - 4 Jun 2018