Maintain long positions. The E-mini Dow formed a “Doji” candle yesterday. It settled at 26,200 pts, after hovering between a high of 26,268 pts and low of 26,069 pts throughout the day. Still, the bullish sentiment stays unchanged as this candle can only be viewed as buyers probably taking a breather following the recent surge. Since the 14-day RSI indicator is now rising higher without being overbought, this indicates that the upside momentum has not been diminished yet. Overall, we believe the rebound that started off 30 Oct’s “Bullish Engulfing” pattern will likely continue in the coming sessions.

Presently, the immediate support is seen at 25,365 pts, ie the low of 6 Nov. If price breaks down, the next support is anticipated at the 25,000-pt psychological mark. On the other hand, we are eyeing the near-term resistance at 26,522 pts, determined from the high of 10 Oct’s long black candle. This is followed by the 26,966-pt record high.

Thus, we advise traders to maintain long positions, since we initially recommended initiating long above the 24,823-pt level on 1 Nov. At the same time, a trailing-stop can be set below the 25,365-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 9 Nov 2018