Stay long. The E-mini Dow’s upward momentum continued as expected, as another white candle was formed last night. It gained 84 pts to close at 25,758 pts after it oscillated between a high of 25,791 pts and low of 25,663 pts. From a technical perspective, we expect the rebound from 15 Aug’s “Hammer” pattern to continue. This is because the E-mini Dow has posted a third consecutive white candle and marked a higher close above the rising 21-day SMA line – implying the near-term market sentiment is bullish. Overall, we maintain our bullish near-term outlook.

As shown in the chart, we are eyeing the immediate support at 24,955 pts, which was obtained from the low of 15 Aug’s “Hammer” pattern. If a decisive breakdown occurs, look to 24,611 pts – ie the previous low of 11 Jul – as the next support. Towards the upside, the immediate resistance is seen at 25,813 pts, or the high of 27 Feb. The next resistance is maintained at the 26,000-pt psychological spot.

Consequently, we advise traders to stay long, following our recommendation of initiating long above the 24,600-pt level on 11 Jul. At the same time, a trailing-stop set below the 24,955-pt threshold – in order to lock in part of the profits – is preferable

Source: RHB Securities Research - 21 Aug 2018