Stay short. The E-mini Dow ended higher to form a “Doji” candle yesterday. It settled at 24,822 pts, after hovering between a high of 24,860 pts and low of 24,709 pts throughout the day. Despite this, we maintain our near-term negative sentiment, as the index is still trading below the 24,840-pt resistance mentioned previously. Again, as long as the E-mini Dow does not recoup losses from 29 May„s long black candle, the near-term downside momentum is not over yet. Overall, we keep our negative view on the E-mini Dow?s near-term outlook.

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

Therefore, we advise traders to stay short, following our recommendation of initiating short below the 24,600-pt level on 30 May. A trailing-stop can be set above the 24,840-pt threshold in order to limit the risk per trade.

Source: RHB Securities Research - 6 Jun 2018