The bullish trend remains unchanged; maintain long positions. The E-mini Dow’s upside strength continued as expected after it ended higher to form a white candle last night. It rose 81 pts to close at 26,860 pts, off its high of 26,983 pts and low of 26,688 pts. Technically speaking, investor sentiment remains bullish, since the index recouped the previous day’s losses and marked a higher close above the rising 21-day SMA line. Overall, we expect the market to rise further if the immediate 27,009-pt resistance is taken out decisively in the coming sessions.

According to the daily chart, we maintain the immediate support at 26,445 pts, which was the low of 27 Jun. If a breakdown arises, the next support is seen at 25,891 pts – this was determined from the low of 13 Jun’s “Hammer” pattern. To the upside, the near-term resistance is situated at the 27,009-pt historical high. This is followed by the 28,000-pt psychological spot.

Hence, we advise traders to maintain long positions, since we originally recommended initiating long above the 25,437-pt level on 7 Jun. At the same time, a trailing-stop set below the 26,445-pt threshold is preferable to secure part of the gains.

Source: RHB Securities Research - 11 Jul 2019