Stay long while setting a stop-loss below the 25,032-pt support. The E-mini Dow formed a white candle last night. It gained 293 pts to close at 26,037 pts, off the session’s low of 25,620 pts. From a technical perspective, market sentiment remains positive. This is because the index has recouped the previous session’s losses and marked a higher close above the 200-day SMA line. In addition, the 14-day RSI indicator started to improve to a better reading, enhancing the positive sentiment as well. Overall, we keep our positive view on the E-mini Dow’s outlook.

According to the daily chart, the immediate support level is seen at 25,032 pts, which was the previous low of 6 Aug. Meanwhile, the next support is anticipated at 24,610 pts, obtained from the low of 3 Jun. To the upside, we maintain the immediate resistance level at 26,408 pts, which was the high of 13 Aug. If a breakout occurs, the next resistance is set at the 27,000-pt psychological spot.

Therefore, we advise traders to maintain long positions, following our recommendation of initiating long above the 26,035-pt level on 9 Aug. A stop-loss is advisable to set below the 25,032-pt threshold in order to minimise the downside risk.

Source: RHB Securities Research - 29 Aug 2019