The market is moving towards a historical high; maintain long positions. The upward momentum of the Emini Dow continued as expected, as a white candle was formed last night. It rose 160 pts to close at 26,434 pts, after oscillating between a high of 26,477 pts and low of 26,237 pts. As the E-mini Dow has marked a higher close above the rising 21-day SMA line, this implies that the bulls are extending their buying momentum. This may also lead us to believe that the upside swing that started with 11 Sep’s “Bullish Engulfing” pattern may persist. Overall, we remain bullish on our near-term outlook.

As seen in the chart, we are eyeing the immediate support level at 25,764 pts, which was the low of 11 Sep’s “Bullish Engulfing” pattern. If the price breaks down, the next support is seen at 24,955 pts, determined from the previous low of 15 Aug. Towards the upside, the near-term resistance is maintained at the 26,684-pt historical high. This is followed by the 27,000-pt psychological mark.

Recall that on 11 Jul, we initially recommended traders to initiate long positions above the 24,600-pt level. We continue to advise them to stay long for now, while setting a trailing-stop below the 25,764-pt threshold. This is in order to lock in part of the gains.

Source: RHB Securities Research - 20 Sept 2018