The near-term upside move is likely to continue – maintain long positions. The upward movement in the Emini Dow has continued as expected: a white candle was formed last Friday. It rose 82 pts to close at 25,674 pts, off the session’s low of 25,506 pts. Market sentiment remains bullish in the near term, as the index has posted a second consecutive white candle and breached above the 25,661-pt resistance mentioned previously. In addition, the 14-day RSI indicator is now rising higher without being overbought, suggesting the bullish sentiment has been enhanced. Overall, the near-term bullish outlook should remain intact.

According to the daily chart, the immediate support level is now seen at 24,955 pts, which was the low of 15 Aug’s “Hammer” pattern. The next support is anticipated at 24,611 pts – this was determined from the low of 11 Jul. To the upside, we anticipate the immediate resistance at 25,813 pts, which is situated at the high of 27 Feb. The next resistance is likely to be at the 26,000-pt psychological mark.

Consequently, we advise traders to maintain long positions, given we initially recommended initiating long above the 24,600-pt level on 11 Jul. For now, a new trailing-stop can be set below the 24,955-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 20 Aug 2018