Bullish trend is likely to continue; stay long. The E-mini Dow formed a white candle yesterday. It surged 202 pts to close at 26,678 pts, after oscillating between a high of 26,754 pts and low of 26,516 pts. From a technical viewpoint, the bullish trend is likely to continue in the near term. This was after the index recouped most of the previous week’s losses and marked a higher close above the rising 21-day SMA line. Furthermore, as the 14-day RSI indicator turned higher to register a better reading of 67.32 pts as of yesterday, the bullish sentiment has been enhanced. Overall, we stay bullish on the E-mini Dow’s near-term outlook.

As seen in the chart, we are eyeing the immediate support at 25,966 pts, determined from the low of 18 Sep. If this level is taken out, look to 25,607 pts – obtained from the previous low of 23 Aug – as the next support. To the upside, we anticipate the near-term resistance at the 26,797-pt historical high. This is followed by the 27,000-pt psychological mark.

Hence, we advise traders to maintain long positions, following our recommendation to initiate long above the 24,600-pt level on 11 Jul. Meanwhile, a trailing stop can be set below the 25,966-pt threshold in order to lock in part of the profits.

Source: RHB Securities Research - 2 Oct 2018