Stay long while setting a new trailing-stop below the 26,445-pt level. The E-mini Dow’s upside strength continued as expected after it ended higher to form a white candle last night. It gained 173 pts to settle at 26,970 pts, off the session’s low of 26,750 pts. As the index has successfully posted a second consecutive white candle and hit its new historical high, this can be viewed as the buyers extending their buying momentum. Furthermore, in view that the 21-day SMA line is likely to turn higher, the bullish sentiment stays intact.

According to the daily chart, we now anticipate the immediate support level at 26,445 pts, which was the low of 27 Jun. If this level is taken out decisively, look to 25,891 pts – ie the low of 13 Jun’s “Hammer” pattern – as the next support. Towards the upside, we are now eyeing the near-term resistance level at the 27,000-pt psychological spot. This is followed by the 28,000-pt round figure.

To re-cap, on 7 Jun, we initially recommended traders initiate long positions above the 25,437-pt level. We continue to advise them to stay long for now, while setting a new trailing-stop below the 26,445-pt threshold. This is in order to lock in a larger part of the profits.

Source: RHB Securities Research - 4 Jul 2019