Initiate long positions above the 24,823-pt level. The E-mini Dow formed a white candle last night. It rose 218 pts to close at 25,077 pts, off its high of 25,303 pts and low of 24,823 pts. As the index formed a second consecutive white candle and hit its highest close in more than a week, this indicates that market sentiment is turning positive. Yesterday’s white candle can be viewed as a continuation of the bulls extending the rebound from 30 Oct’s “Bullish Engulfing” pattern. Yesterday’s closing has also triggered our trailing-stop, which we had previously recommended at the 25,000-pt threshold.

According to the daily chart, we anticipate the immediate support at 24,823 pts, ie the low of 31 Oct. The next support is seen at 24,086 pts, determined from the low of 30 Oct’s “Bullish Engulfing” pattern. Towards the upside, the immediate resistance is set at 25,845 pts, which was the high of 17 Oct. Meanwhile, the next resistance is seen at 26,522 pts, situated at the high of 10 Oct’s long black candle.

Hence, we advise traders to initiate long positions above the 24,823-pt level. A stop-loss can be set below the 24,086-pt threshold in order to minimise the downside risk.

Source: RHB Securities Research - 1 Nov 2018