Maintain long positions, with a trailing-stop set below the 25,087-pt support. The E-mini Dow formed a white candle yesterday. It gained 79 pts to close at 25,294 pts, off its high of 25,334 pts and low of 25,192 pts. From a technical perspective, the index has marked a higher close vis-à-vis the previous session, implying that the nearterm upside move is not diminished yet. Moreover, this movement may further extend the rebound that started with 2 Aug’s “Hammer” pattern. Overall, we keep our bullish view on E-mini Dow’s near-term outlook.

Based on the daily chart, the immediate support is seen at 25,087 pts, which was the low of 2 Aug’s “Hammer” pattern. The next support is maintained at 24,611 pts, obtained from the previous low of 11 Jul. To the upside, we are eyeing the immediate resistance at 25,661 pts, ie the high of 7 Aug. If a breakout occurs, look to 25,813 pts – which was the high of 27 Feb – as the next resistance.

Thus, 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. At the same time, a trailing-stop can be set below the 25,087-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 15 Aug 2018