Near-term upside move remains intact; maintain long positions. The E-mini Dow formed a “Doji” candle with a long lower shadow last night. During the intraday session, it dropped to a low of 25,087 pts before ending at 25,305 pts for the day. Again, it is not surprising that buyers may be taking a pause following the recent gains. Technically speaking, yesterday’s long lower shadow implied that there was initial selling pressure during the day before the market moved up by the end of the trading session. This indicated that the near-term market outlook was still positive.

As seen in the chart, we are eyeing the immediate support, anticipated at 24,912 pts, ie the low of 20 Jul. If this level is taken out, look to 24,600 pts – defined near the midpoint of 9 Jul’s long white candle – as the next support. Towards the upside, the immediate resistance level is seen at 25,572 pts, which was the high of 27 Jul. Meanwhile, the next resistance is maintained at 25,813 pts, ie the previous 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 is preferably set below the 24,912-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 3 Aug 2018