Maintain long positions as rebound is not showing signs of weakness. The E-mini Dow has again tested the immediate resistance of 26,779 pts, reaching a high of 26,925 pts before softening its gains to 93 pts, and closing at 26,726 pts. The index has been showing signs of developing a minor consolidation around the said immediate resistance over the past week, and we are not seeing signals of price exhaustion. This comes after it recently breached above the 200-day SMA line. We maintain our positive trading bias.

We advise traders to stay in long positions. For risk-management purposes, a stop-loss is recommended below the 26,150-pt mark.

We revise the immediate support to 26,330 pts – the low of 20 Jul, followed by 26,150 pts, which is near the 200- day SMA line. Moving up, the resistance level is maintained at 26,779 pts, or the high of 16 Jun. This is followed by the 27,000-pt round figure.

Source: RHB Securities Research - 22 Jul 2020