Maintain long positions. The E-mini Dow ended slightly lower by 33 pts to close at 26,520 pts, after hitting a high of 26,724 pts. Price actions over the three recent sessions, after the index tested the 26,779-pt resistance mark, suggest that a minor consolidation may be taking place, ie there is no adverse price signal to indicate a negative price reversal. Hence, we are keeping our positive trading bias.

As the index has not been flashing out negative price signals over the past three sessions, we advise traders to stay in long positions. For risk-management purposes, a stop-loss is recommended below the 26,150-pt mark.

We are keeping the immediate support at 26,150 pts, which is near the 200-day SMA line. This is followed by 25,874 pts, or 14 Jul’s low. Conversely, the resistance level is set at 26,779 pts – the high of 16 Jun. This is followed by the 27,000-pt round figure.

Source: RHB Securities Research - 20 Jul 2020