Stay long. The E-mini Dow ended higher to form a white candle last night. It gained 120 pts to close at 25,575 pts, after hovering between a high of 25,707 pts and low of 25,226 pts throughout the session. The market sentiment remains positive as the index has marked a higher close above the recent low of 25,032-pt support. From a technical perspective, as long as the E-mini Dow does not erase the gains from 6 Aug’s white candle, there is a possibility that the rebound would persist. Overall, we remain bullish on the E-mini Dow’s outlook.

Based on the daily chart, the immediate support level is seen at 25,032 pts, which was the recent low of 6 Aug. If this level is taken out, look to 24,610 pts – ie the previous low of 3 Jun – as the next support. Towards the upside, we are eyeing the immediate resistance level at 26,408 pts, defined from 13 Aug’s high. Meanwhile, the next resistance is maintained at the 27,000-pt psychological spot.

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 mark in order to minimise the downside risk.

Source: RHB Securities Research - 16 Aug 2019