Near-term uptrend likely to continue; maintain long positions. The E-mini Dow’s upward momentum continued as expected, as another white candle was formed last night. It rose 132 pts to close at 25,600 pts, after oscillating between a high of 25,661 pts and low of 25,460 pts. From a technical perspective, the index has breached above the previously-indicated 25,572-pt resistance and posted a third consecutive white candle. This indicates that the rebound, which started from 2 Aug’s “Hammer” pattern, may continue. Overall, we stay bullish in our near-term outlook.

Currently, we maintain the immediate support at 25,087 pts, determined from the low of 2 Aug’s “Hammer” pattern. If a breakdown arises, look to 24,611 pts – which was the low of 11 Jul – as the next support. On the other hand, the immediate resistance is now seen at 25,813 pts, ie the previous high of 27 Feb. The next resistance would likely be at the 26,000-pt psychological spot.

Therefore, we advise traders to maintain long positions, 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 25,087-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 8 Aug 2018