Longer-term bullish outlook stays intact. Today, we analyse the E-mini Dow’s longer-term trend based on its weekly chart. Judging from this chart, we do not anticipate the market trend to turn negative now. This is given that the index has failed to break below the 25,000-pt threshold. Meanwhile, the E-mini Dow is still trading above the 50-week SMA line, suggesting the bulls could be extending the upward momentum in coming sessions. Overall, we view the recent selling momentum as a technical pullback only. This was after the market rebound that started in early January.

Based on the weekly chart, we anticipate the immediate support at the 25,000-pt round figure – this is also situated near the low of 15 Feb’s long white candle. The crucial support is seen at 21,452 pts, which was determined from the lowest point in 2018. To the upside, the immediate resistance is set at the 26,966-pt record high. If the price breaks out, the next resistance will likely be at the 28,000-pt psychological spot.

Yet, based on our analysis of the daily chart, we advise traders to maintain short positions. This is because the market is still holding below the 26,000-pt resistance mentioned in our 27 May daily report. Kindly refer to this report for further details.

Source: RHB Securities Research - 28 May 2019