Maintain long positions. The E-mini Dow formed a white candle last Friday. It rose 332 pts to close at 25,907 pts, off its high of 25,929 pts and low of 25,576 pts. Based on the current outlook, the index has been able to stay above the recent low of 25,032-pt support for nearly two weeks, which implies that the buyers are still in control of the market. Given that the E-mini Dow has posted a second consecutive white candle, this has led us to believe that the rebound that started off 6 Aug’s white candle may continue. Overall, we remain bullish on the E-mini Dow’s outlook.

According to the daily chart, the immediate support level is maintained at 25,032 pts, determined from the recent low of 6 Aug. The next support would likely be at 24,610 pts, which was the previous low of 3 Jun. To the upside, the immediate resistance level is seen at 26,408 pts, ie the high of 13 Aug. The next resistance is anticipated at the 27,000-pt psychological mark.

Thus, we advise traders to stay long, since we had originally recommended initiating long above the 26,035-pt level on 9 Aug. A stop-loss is preferably set below the 25,032-pt threshold in order to limit the downside risk.

Source: RHB Securities Research - 19 Aug 2019