Stay long. After posting three white candles in a row, the E-mini Dow ended lower to form a black candle last night. It declined 187 pts to close at 25,931 pts, off its high of 26,198 pts and low of 25,885 pts. Presently, the market sentiment remains positive as the index has continued to stay above the 200-day SMA line. On a technical basis, as long as the index does not break below the 25,032-pt support mentioned since two weeks ago, there is a possibility that the rebound would persist. Overall, we remain bullish on the E-mini Dow’s outlook.

Judging from the current outlook, the immediate support level is maintained at 25,032 pts, ie the previous low of 6 Aug. If this level is taken out, look to 24,610 pts – which was the low of 3 Jun – as the next support. To the upside, we are eyeing the immediate resistance level at 26,408 pts, ie the high of 13 Aug. The next resistance is anticipated at the 27,000-pt psychological mark.

Hence, we advise traders to stay long, given that we previously recommended initiating long above the 26,035-pt level on 9 Aug. At the same time, a stop-loss is advisable to set below the 25,032-pt mark in order to minimise the risk per trade.

Source: RHB Securities Research - 21 Aug 2019