Stay long, with a new trailing-stop set below the 26,657-pt level. The upside strength of the E-mini Dow continued as expected, as a white candle was formed last Friday. It gained 232 pts to close at 27,309 pts, off its high of 27,330 pts and low of 27,070 pts. On a technical basis, the uptrend is likely to persist, as the index has posted a third consecutive white candle and registered a new record high. We view last Friday’s higher close as a continuation of buyers extending the upside swing from 9 Jul’s “Hammer” pattern. Overall, we keep our bullish view on the E-mini Dow’s outlook.

Currently, we anticipate the immediate support at 26,657 pts, obtained from the low of 9 Jul’s “Hammer” pattern. If this level is taken out, look to 26,300 pts – ie set near the midpoint of 18 Jun’s long white candle – as the next support. Towards the upside, we maintain the near-term resistance at the 27,500-pt round figure. This is followed by the 28,000-pt psychological spot.

To recap, on 7 Jun, we initially recommended traders to 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 26,657-pt threshold. This is in order to lock in a larger part of the profits.

Source: RHB Securities Research - 15 Jul 2019