Stay long. The E-mini Dow ended lower to form another black candle. It dropped 116 pts to close at 25,215 pts, off the session’s high of 25,371 pts and low of 25,141 pts. Despite this, we maintain our near-term positive sentiment, as the index is still holding above the previously-indicated 25,087-pt support. As the bullishness of 2 Aug’s “Hammer” pattern has not been cancelled, this shows that the near-term rebound stays intact. Overall, we remain bullish on the E-mini Dow’s near-term outlook.

As seen in the chart, we are eyeing the immediate support at 25,087 pts, ie the low of 2 Aug’s “Hammer” pattern. If a breakdown arises, look to 24,611 pts – determined from the previous low of 11 Jul – as the next support. Towards the upside, the immediate resistance is seen at 25,661 pts, which was the high of 7 Aug. Meanwhile, the next resistance would likely be at 25,813 pts, obtained from the high of 27 Feb.

Recall that on 11 Jul, we initially recommended traders to initiate long positions above the 24,600-pt level. We continue to advise staying long for now, while setting a trailing-stop below the 25,087-pt threshold. This is in order to lock in part of the profits.

Source: RHB Securities Research - 14 Aug 2018