Upside move is likely to continue; stay long. The E-mini Dow’s upside strength continued as expected after it ended higher to form a third consecutive white candle. It gained 248 pts to close at 25,325 pts, after oscillating between a high of 25,362 pts and low of 25,046 pts. The upside move is likely to continue, as the index has marked a higher close vis-à-vis the previous sessions since 30 Oct. This can also be viewed as a continuation of buyers expanding the upside swing that started from the “Bullish Engulfing” pattern that formed on 29-30 Oct.

As seen in the chart, the immediate support is seen at 24,823 pts, which was the low of 31 Oct. If the price breaks down, look to 24,086 pts – ie the low of 30 Oct’s “Bullish Engulfing” pattern – as the next support. To the upside, we anticipate the immediate resistance at 25,845 pts, obtained from the high of 17 Oct. The next resistance would likely be at 26,522 pts, ie the high of 10 Oct’s long black candle.

Therefore, we advise traders to maintain long positions, following our recommendation to initiate long above the 24,823-pt level on 1 Nov. In the meantime, a stop-loss can be set below the 24,086-pt threshold in order to limit downside risk.

Source: RHB Securities Research - 2 Nov 2018