Initiate short positions below the 24,283-pt level. The E-mini Dow formed a black candle yesterday. It dropped 168 pts to close at 24,135 pts, off the session’s high of 24,564 pts and low of 24,079 pts. As the index has closed below the 200-day SMA line and hit its lowest close in nearly two months, this indicates that market sentiment is turning negative. Yesterday’s candle can be viewed as a continuation of bears extending the downside swing that started from 13 Jun’s black candle. Its close also triggered our stop-loss, which we had previously recommended inventors to set at the 24,227-pt threshold.

Presently, we are eyeing the immediate resistance at 24,283 pts, situated near the 200-day SMA line. The next resistance would likely be at 24,858 pts, obtained near 20 June’s high and 18 June’s low. Towards the downside, the immediate support is seen at 23,467 pts, which was the previous low of 3 May. If this level is taken out, look to 23,088 pts – determined from the low of 6 Feb – as the next support.

Therefore, we advise traders to initiate short positions below the 24,283-pt level. A stop-loss is preferably set above the 24,858-pt threshold in order to limit the risk per trade.

Source: RHB Securities Research - 28 Jun 2018