Near-term bullish sentiment remains unchanged; stay long. The E-mini Dow formed another black candle last night. It dropped 93 pts to close at 25,016 pts, after oscillating between a high of 25,148 pts and low of 24,839 pts. Yet, we maintain our near-term bullish sentiment as the index is still trading above the rising 21-day SMA line. As the bullishness of 30 May’s “Bullish Harami” pattern has not been negated, this shows that the near term rebound stays intact. Overall, we remain bullish on the E-mini Dow’s near term outlook.

As seen in the chart, we are eyeing the immediate support at 24,860 pts, ie near the highs of 29 May and 4 Jun. The next support is maintained at 24,227 pts, which was the low of 30 May’s “Bullish Harami” pattern. Towards the upside, the immediate resistance is seen at 25,400 pts, obtained from the previous high of 11 June. Meanwhile, the next resistance is maintained at 25,813 pts, defined from the previous high of 27 Feb.

Therefore, we advise traders to stay long, following our recommendation to initiate long above the 24,860-pt level on 7 Jun. In the meantime, a stop-loss is advisable at below the 24,227-pt threshold in order to limit downside risk.

Source: RHB Securities Research - 19 Jun 2018