Stay long, with a trailing-stop set below the 26,657-pt support. Upward momentum in the E-mini Dow continued as expected, as another white candle was formed last night. It gained 148 pts to close at 27,324 pts, off the session’s high of 27,358 pts and low of 27,159 pts. Technically, the index has marked a higher close vis-à-vis the previous sessions since 22 Jul. This indicates that the upside swing, which started from 9 Jul’s “Hammer” pattern, may continue. Overall, we expect the market to rise further if the immediate 27,397-pt resistance mentioned previously is taken out decisively in the coming sessions.

As seen in the chart, the immediate support is seen at 26,657 pts, which was the low of 9 Jul’s “Hammer” pattern. If this level is taken out, look to 26,300 pts – ie near the midpoint of 18 Jun’s long white candle – as the next support. On the other hand, we anticipate the near-term resistance at the 27,397-pt record high. This is followed by the 28,000-pt psychological spot.

Thus, we advise traders to maintain long positions, in line with our initial recommendation to have long positions above the 25,437-pt level on 7 Jun. A trailing-stop can be set below the 26,657-pt threshold in order to lock in part of the profits.

Source: RHB Securities Research - 24 Jul 2019