Maintain long positions. The E-Mini Dow’s bulls taking a breather yesterday, declining 99 pts to settle at 34,776 pts. During Tuesday’s session, the index initially started stronger at 34,890 pts to touch the session high at 34,915 pts. Before it could advance further, the brief momentum faltered, which saw the E-Mini Dow retrace to the session low at 34,747 pts – it closed at 34,776 pts. Based on the previous session, strong support was established at 34,548 pts. As long as the index consolidates above the support level, we think the bullish momentum may resume again in the near future. So far, the E-Mini Dow is still moving upwards based on a “higher highs and higher lows” bullish structure. Hence, we deem the recent pullback as a healthy correction and continue to stay with our positive trading bias.

We recommend traders keep the long positions initiated at 34,082 pts, or the closing level of 24 Jun. To mitigate the downside risks and protect profits, a trailing-stop mark is fixed at 34,150 pts.

On the downside, the immediate support is marked at 34,548 pts, or the low of 12 Jul, and followed by 34,377 pts – the low of 1 Jul. Conversely, the resistance levels are pegged at 35,000 pts – 2021’s high – and 35,200 pts, ie the probable new high.

Source: RHB Securities Research - 14 Jul 2021