Maintain long positions. The E-mini Dow ended lower to form another black candle yesterday. It declined 101 pts to close at 26,419 pts, after oscillating between a high of 26,627 pts and low of 26,369 pts. Based on the current outlook, the index has been able to stay above the previously indicated 25,966-pt support for more than a week, which implies that buyers are still in control of the market. With the 21-day SMA line still edging upwards, this has led us to believe that the upside swing that started from early July may continue. Overall, we remain bullish on the E-mini Dow’s near term outlook.

According to the daily chart, we are eyeing the immediate support at 25,966 pts, determined from the low of 18 Sep. Meanwhile, the next support is seen at 25,607 pts, which was the previous low of 23 Aug. Towards the upside, the near-term resistance is maintained at the 26,797-pt record high. This is followed by the 27,000-pt psychological spot.

Therefore, we advise traders to stay long, following our recommendation to initiate long above the 24,600-pt level on 11 Jul. In the meantime, a trailing-stop can be set below the 25,966-pt threshold in order to secure part of the profits.

Source: RHB Securities Research - 27 Sept 2018