Stay long while setting a stop-loss below the 24,893-pt support. The E-mini Dow formed a positive candle last Friday. It rose 47 pts to close at 25,428 pts, off the session’s high of 25,596 pts and low of 25,338 pts. Technically, we maintain our positive view, as the index has marked a higher close vis-à-vis the previous session. Meanwhile, as long as the index does not negate the bullishness of 12 Oct’s “Bullish Harami” pattern, the rebound is still in effect. Overall, we stay positive on the E-mini Dow’s outlook.

As seen in the chart, we anticipate the near-term support level at the 25,000-pt psychological mark. This is followed by 24,893 pts, obtained from the low of 12 Oct’s “Bullish Harami” pattern. On the other hand, we are eyeing the immediate resistance level at 25,845 pts, which was the high of 17 Oct. If the price breaks above this level, the next resistance is seen at 26,522 pts, ie the high of 10 Oct’s long black candle.

Hence, we advise traders to maintain long positions, given that we previously recommended initiating long above the 25,500-pt level on 17 Oct. In the meantime, a stop-loss can be set below the 24,893-pt threshold in order to minimise the downside risk.

Source: RHB Securities Research - 22 Oct 2018