Bullish sentiment stays intact, stay long. The buying momentum in the E-mini Dow continued as expected. A white candle was formed yesterday, which pointed towards a continuation of the upside move. It gained 341 pts to settle at 26,378 pts. Technically speaking, investor sentiment remains positive, as the index has posted a second consecutive white candle and remains above the 200-day SMA line. Overall, we expect the market to trend higher if the immediate 26,408-pt resistance is taken out decisively in the coming sessions.

As seen in the chart, we are eyeing the immediate support level at 25,032 pts, ie the low of 6 Aug. The next support is seen at 24,610 pts, determined from the previous low of 3 Jun. Towards the upside, we anticipate the immediate resistance level at 26,408 pts, obtained from 13 Aug’s high. Meanwhile, the next resistance will likely be at the 27,000-pt psychological mark.

Hence, we advise traders to maintain long positions, since we initially recommended 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 to limit the downside risk.

Source: RHB Securities Research - 30 Aug 2019