diff --git a/src/CMakeLists.txt b/src/CMakeLists.txt
--- a/src/CMakeLists.txt
+++ b/src/CMakeLists.txt
@@ -106,6 +106,8 @@
     dolphinremoveaction.cpp
     middleclickactioneventfilter.cpp
     dolphinnewfilemenu.cpp
+    dolphindebug.cpp
+    utils/directoryfindchilditem.cpp
 )
 
 ecm_qt_declare_logging_category(dolphinprivate_LIB_SRCS HEADER dolphindebug.h IDENTIFIER DolphinDebug CATEGORY_NAME org.kde.dolphin)
diff --git a/src/tests/CMakeLists.txt b/src/tests/CMakeLists.txt
--- a/src/tests/CMakeLists.txt
+++ b/src/tests/CMakeLists.txt
@@ -61,6 +61,11 @@
 TEST_NAME dolphinmainwindowtest
 LINK_LIBRARIES dolphinprivate dolphinstatic Qt5::Test)
 
+# CommonAncestorTest
+ecm_add_test(directoryfindchilditemtest.cpp
+TEST_NAME directoryfindchilditemtest
+LINK_LIBRARIES dolphinprivate dolphinstatic Qt5::Test)
+
 # DragAndDropHelperTest
 ecm_add_test(draganddrophelpertest.cpp LINK_LIBRARIES dolphinprivate Qt5::Test)
 
diff --git a/src/tests/directoryfindchilditemtest.cpp b/src/tests/directoryfindchilditemtest.cpp
new file mode 100644
--- /dev/null
+++ b/src/tests/directoryfindchilditemtest.cpp
@@ -0,0 +1,65 @@
+/***************************************************************************
+ *   Copyright (C) 2018 by Emirald Mateli <aldo.mateli@gmail.com>          *
+ *                                                                         *
+ *   This program is free software; you can redistribute it and/or modify  *
+ *   it under the terms of the GNU General Public License as published by  *
+ *   the Free Software Foundation; either version 2 of the License, or     *
+ *   (at your option) any later version.                                   *
+ *                                                                         *
+ *   This program is distributed in the hope that it will be useful,       *
+ *   but WITHOUT ANY WARRANTY; without even the implied warranty of        *
+ *   MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the         *
+ *   GNU General Public License for more details.                          *
+ *                                                                         *
+ *   You should have received a copy of the GNU General Public License     *
+ *   along with this program; if not, write to the                         *
+ *   Free Software Foundation, Inc.,                                       *
+ *   51 Franklin Street, Fifth Floor, Boston, MA 02110-1301 USA            *
+ ***************************************************************************/
+
+#include "utils/directoryfindchilditem.cpp"
+#include <QTest>
+
+class DirectoryFindChildItemTest : public QObject
+{
+    Q_OBJECT
+
+private slots:
+    void testDirectoryFindChildItem_data();
+    void testDirectoryFindChildItem();
+};
+
+void DirectoryFindChildItemTest::testDirectoryFindChildItem_data()
+{
+    QTest::addColumn<QUrl>("directory");
+    QTest::addColumn<QUrl>("url");
+    QTest::addColumn<QUrl>("expected");
+
+    QTest::newRow("Test directory with file located in one of its children")
+            << QUrl::fromLocalFile("dir")
+            << QUrl::fromLocalFile("dir/sub/x/y/z")
+            << QUrl::fromLocalFile("dir/sub");
+
+    QTest::newRow("Test directory with trailing path delimiter")
+            << QUrl::fromLocalFile("dir/sub/x/")
+            << QUrl::fromLocalFile("dir/sub/x/y/z")
+            << QUrl::fromLocalFile("dir/sub/x/y");
+
+    QTest::newRow("Test two unrelated directories")
+            << QUrl::fromLocalFile("unrelated")
+            << QUrl::fromLocalFile("dir/sub/x/y/z")
+            << QUrl();
+}
+
+void DirectoryFindChildItemTest::testDirectoryFindChildItem()
+{
+    QFETCH(QUrl, directory);
+    QFETCH(QUrl, url);
+    QFETCH(QUrl, expected);
+
+    QCOMPARE(directoryFindChildItem(directory, url), expected);
+}
+
+QTEST_MAIN(DirectoryFindChildItemTest)
+
+#include "directoryfindchilditemtest.moc"
diff --git a/src/utils/directoryfindchilditem.h b/src/utils/directoryfindchilditem.h
new file mode 100644
--- /dev/null
+++ b/src/utils/directoryfindchilditem.h
@@ -0,0 +1,6 @@
+#ifndef DIRECTORY_FIND_CHILD_ITEM
+#define DIRECTORY_FIND_CHILD_ITEM
+
+QUrl directoryFindChildItem(const QUrl& directory, const QUrl& filename);
+
+#endif
diff --git a/src/utils/directoryfindchilditem.cpp b/src/utils/directoryfindchilditem.cpp
new file mode 100644
--- /dev/null
+++ b/src/utils/directoryfindchilditem.cpp
@@ -0,0 +1,30 @@
+#include <QString>
+#include <QUrl>
+#include <QDir>
+#include "directoryfindchilditem.h"
+
+/**
+ * Returns the item which is located in "directory" argument
+ * when "filename" is an item located in it or one of its children.
+ * Returns an empty QUrl when that is not the case
+ *
+ * <pre>directoryFindChildItem("~/dir", "~/dir/x/y/z") -> "~/dir/x"</pre>
+ *
+ *
+ * @param directory
+ * @param filename
+ * @return
+ */
+QUrl directoryFindChildItem(const QUrl& directory, const QUrl& filename)
+{
+    const QString dirStr = directory.adjusted(QUrl::StripTrailingSlash).toString();
+    const QString urlStr = filename.toString();
+    const int dirLen = dirStr.length() + 1;
+
+    if (!urlStr.startsWith(dirStr)) {
+        return QUrl();
+    }
+
+    return QUrl(QStringLiteral("%1/%2").arg(
+        dirStr, urlStr.mid(dirLen, urlStr.indexOf(QDir::separator(), dirLen + 1) - dirLen)));
+}
diff --git a/src/views/dolphinview.h b/src/views/dolphinview.h
--- a/src/views/dolphinview.h
+++ b/src/views/dolphinview.h
@@ -777,6 +777,7 @@
 private:
     void updatePalette();
 
+    QUrl m_observedCreatedItem;
     bool m_active;
     bool m_tabsForFiles;
     bool m_assureVisibleCurrentIndex;
diff --git a/src/views/dolphinview.cpp b/src/views/dolphinview.cpp
--- a/src/views/dolphinview.cpp
+++ b/src/views/dolphinview.cpp
@@ -68,6 +68,7 @@
 #include <QScrollBar>
 #include <QTimer>
 #include <QVBoxLayout>
+#include <utils/directoryfindchilditem.h>
 
 DolphinView::DolphinView(const QUrl& url, QWidget* parent) :
     QWidget(parent),
@@ -1335,9 +1336,16 @@
 
 void DolphinView::observeCreatedItem(const QUrl& url)
 {
-    if (m_active) {
-        forceUrlsSelection(url, {url});
+    if (!m_active) {
+        return;
     }
+
+    // In case url is located in a subdirectory, select its ancestor located in the current dir.
+    m_observedCreatedItem = directoryFindChildItem(m_model->directory(), url);
+
+    forceUrlsSelection(m_observedCreatedItem, {m_observedCreatedItem});
+    // updateViewState call is needed when the url is a directory and it already exists
+    updateViewState();
 }
 
 void DolphinView::slotDirectoryRedirection(const QUrl& oldUrl, const QUrl& newUrl)
@@ -1501,7 +1509,21 @@
 {
     // Update the view-state. This has to be done asynchronously
     // because the view might not be in its final state yet.
-    QTimer::singleShot(0, this, &DolphinView::updateViewState);
+    QTimer::singleShot(0, [this]() {
+        // if a new item was created mark it as selected as soon as its found by the model
+        if (m_observedCreatedItem != QUrl()) {
+            const int index = m_model->index(m_observedCreatedItem);
+
+            if (index) {
+                m_container->controller()->selectionManager()->setCurrentItem(index);
+                forceUrlsSelection(m_observedCreatedItem, {m_observedCreatedItem});
+
+                m_observedCreatedItem = QUrl();
+            }
+        }
+
+        updateViewState();
+    });
 
     emit directoryLoadingCompleted();