Maintain long positions, as the upward move is likely to resume. The E-mini Dow has likely completed its minor sideways consolidation after the 27,500-pt support level was tested over the latest two sessions. The latest trade saw the index reaching a low of 27,473 pts before a positive intraday price reversal set in, which sent the E-mini Dow 190 pts higher to close at 27,859 pts. Additionally, the RSI is also showing sign of reversing – indicating that momentum is returning. We maintain our positive trading bias.

We advise traders to stay in long positions. We initiated these at 26,491 pts, ie the closing level of 14 Jul. For risk-management purposes, a stop-loss can now be placed below the 27,000-pt level.

We are keeping the immediate support at 27,500 pts. This is followed by the 27,000-pt round figure. Conversely, the immediate resistance is set at 28,000 pts, and followed by the 28,250-pt threshold.

Source: RHB Securities Research - 24 Aug 2020