Maintain long positions. The E-mini Dow ended higher to form a positive candle last Friday. It gained 127 pts to close at 24,599 pts, after oscillating between a high of 24,664 pts and low of 24,445 pts. Market sentiment remains positive in the near term, as the index continues to stay above the 24,227-pt support mentioned since three weeks ago. From a technical perspective, as long as the E-mini Dow does not negate the bullishness of “Bullish Harami” pattern created on 29-30 May, there is a possibility that the rebound would keep going.

According to the daily chart, the immediate support level is seen at 24,227 pts, which was the low of 30 May’s “Bullish Harami” pattern. If the price breaks down, the next support is maintained at 23,467 pts, ie the previous low of 3 May. To the upside, we anticipate the immediate resistance level at 25,400 pts, determined from the high of 11 Jun. The next resistance is maintained at 25,813 pts, defined from the previous high of 27 Feb.

Hence, we advise traders to maintain long positions, in line with our initial recommendation to have long positions above the 24,860-pt level on 7 June. A stop-loss is preferably set below the 24,227-pt threshold in order to minimise the downside risk.

Source: RHB Securities Research - 25 Jun 2018