Rebound likely to continue; maintain long positions. The E-mini Dow ended higher to form a long white candle last night. It surged 447 pts to close at 26,314 pts, off the session’s low of 25,750 pts. As the index has recouped the previous day’s losses and hit its 1-week high, this indicates that the upward momentum is not diminished yet. We view yesterday’s white candle as a continuation of the rebound that began with the recent low of 6 Aug. Overall, we keep our bullish view on the E-mini Dow’s outlook.

Based on the daily chart, the immediate support level is maintained at 25,032 pts, obtained from the recent low of 6 Aug. If a decisive breakdown occurs, the next support is seen at 24,610 pts, which was the previous low of 3 Jun. Towards the upside, the immediate resistance level is now anticipated at 26,408 pts, ie the high of 13 Aug. Meanwhile, the next resistance is situated at the 27,397-pt historical high.

Hence, we advise traders to maintain long positions, following our recommendation of initiating long above the 26,035-pt level on 9 Aug. In the meantime, a stop-loss can be set below the 25,032-pt threshold in order to minimise the risk per trade.

Source: RHB Securities Research - 14 Aug 2019