Stay long, with a trailing-stop set below the 24,600-pt support. Buying momentum in the E-mini Dow continued as expected. Another white candle was formed yesterday, which pointed towards a continuation of the upside move. It gained 55 pts to close at 25,161 pts, after hovering between a high of 25,197 pts and low of 25,081 pts. The near-term upside is likely to continue, as the aforementioned white candle was its fifth in five consecutive sessions. In addition, as the 14-day RSI indicator is now rising higher without being overbought, the bullish sentiment has been enhanced. Overall, the near-term bullish outlook should remain intact.

As seen in the chart, the immediate support is seen at 24,600 pts, situated near the midpoint of 9 Jul’s long white candle. The next support is maintained at the low of 28 Jun’s “Bullish Harami” pattern, at 23,978 pts. To the upside, we are eyeing the immediate resistance at 25,400 pts, which was the previous high of 11 Jun. Meanwhile, the next resistance is anticipated at 25,813 pts, ie the high of 27 Feb.

Hence, we advise traders to stay long, in line with our initial recommendation to have long positions above the 24,600-pt level on 11 Jul. A trailing-stop can be set below the 24,600-pt threshold in order to minimise downside risk.

Source: RHB Securities Research - 19 Jul 2018