Near-term bullish sentiment stays intact; stay long. The upward movement of the E-mini Dow continued as expected, as a while candle was formed yesterday. It gained 128 pts to close at 25,268 pts, after oscillating between a high of 25,327 pts and low of 25,119 pts. From a technical perspective, we expect the rebound that started from 30 May’s “Bullish Harami” pattern to continue. This is because the E-mini Dow has marked a higher close vis-à-vis the previous sessions since 1 Jun, implying that near-term market sentiment is positive. Overall, we maintain our positive near-term outlook.

According to the daily chart, the immediate support is seen at 24,860 pts, ie near the highs of 29 May and 4 Jun. If this level is taken out, look to 24,227 pts – ie the low of 30 May’s “Bullish Harami” pattern – as the next support. To the upside, the near-term resistance is maintained at 25,510 pts and 25,813 pts, determined from the previous high of 12 Mar and 27 Feb respectively.

Therefore, we advise traders to maintain long positions, given that we initially recommended initiating long above the 24,860-pt level on 7 Jun. In the meantime, a stop-loss can be set below the 24,227-pt threshold in order to limit downside risk.

Source: RHB Securities Research - 8 Jun 2018