Maintain long positions, as the bulls are still defending the trend. The E-mini Dow continued to see buying support near the 200-day SMA line and the immediate support of 26,150 pts during the latest session. After hitting a low of 25,905 pts, the index bounced back to settle at 26,319 pts. While the index has been retracing, after recently failing to cross above the 26,779-pt resistance level, the said retracement has generally been mild in nature – it has yet to suggest the development of a trend reversal. Hence, we are keeping 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 are keeping the immediate support at 26,150 pts, which is near the 200-day SMA line. This is followed by 25,874 pts – the low of 14 Jul. 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 - 3 Aug 2020