Stay long while setting a new trailing-stop below the 25,977-pt level. Last night, the E-mini Dow’s upward momentum continued as expected after it formed a positive candle for the fourth consecutive session. It gained 32 pts to close at 26,840 pts, off its high of 26,913 pts and low of 26,771 pts. On a technical basis, we expect the upside swing that started from 4 Sep’s “Bullish Engulfing” pattern is likely to continue. This is because the E-mini Dow has marked a higher close vis-à-vis the previous sessions since 4 Sep, implying that market sentiment is bullish. Overall, we keep our positive view on the E-mini Dow’s outlook.

Presently, we are eyeing the immediate support level at 25,977 pts, ie the low of 4 Sep’s “Bullish Engulfing” pattern. The next support is seen at 25,266 pts, which was the previous low of 26 Aug. Towards the upside, the near-term resistance level is anticipated at the 27,000-pt psychological spot. This is followed by the 27,397-pt historical high.

Thus, we advise traders to maintain long positions, given that we initially recommended initiating long above the 26,035-pt level on 9 Aug. For now, a new trailing-stop can be set below the 25,977-pt threshold in order to minimise the risk per trade.

Source: RHB Securities Research - 10 Sept 2019