Market outlook remains bullish; stay long. The E-mini Dow formed a “Doji” candle with a long lower shadow last night. During the intraday session, it dropped to a low of 26,657 pts before ending at 26,779 pts for the day. From a technical perspective, we think the bullish sentiment stays unchanged, as the index continues to remain above the rising 21-day SMA line. Yesterday’s long lower shadow implied that there was initial selling pressure during the day before the market moved up by trading session’s end. This indicated that the market outlook was still bullish.

Presently, the immediate support is seen at 26,445 pts, ie the low of 27 Jun. If this level is taken out, look to 25,891 pts – which was low of 13 Jun’s “Hammer” pattern – as the next support. On the other hand, we are eyeing the immediate resistance at the 27,009-pt record high. The next resistance is maintained at the 28,000-pt psychological mark.

As a result, we advise traders to stay long, given that we previously recommended initiating long above the 25,437-pt level on 7 Jun. In the meantime, a trailing-stop is advisable – set below the 26,445-pt threshold – to lock in part of the profits.

Source: RHB Securities Research - 10 Jul 2019