Stay long while setting a trailing-stop below the 26,657-pt support. The E-mini Dow formed a white candle last Friday. It gained 53 pts to close at 27,149 pts, off its high of 27,193 pts and low of 27,077 pts. The market sentiment remains bullish as the index has continued to stay above the rising 21-day SMA line. From a technical perspective, the 14-day RSI indicator recovered to a more positive reading at 59.66 pts, this indicates that the upside move would persist in the coming sessions. Overall, we remain bullish on the E-mini Dow’s outlook.

As shown 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 – set near the midpoint of 18 Jun’s long white candle – as the next support. On the other hand, we maintain the near-term resistance at the 27,397-pt record high. This is followed by the 28,000-pt psychological spot.

Hence, 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 - 29 Jul 2019