Stay long while setting a new trailing-stop below the 25,223-pt support. The E-mini Dow’s upside strength continued as expected after it ended higher and left an upside gap last night. It gained 307 pts to close at 25,846 pts, after oscillating between a high of 26,088 pts and low of 25,685 pts. As the index has successfully marked a higher close vis-à-vis the previous sessions since 26 Nov, this can be viewed as the buyers extending their buying momentum. Furthermore, in view that the 21-day SMA line is likely to begin turning upwards, this also implies a positive outlook sentiment.

Based on the daily chart, the immediate support level is maintained at 25,223 pts, ie the low of 30 Nov. The next support is seen at 24,727 pts, which was the low of 28 Nov’s long white candle. On the other hand, we anticipate the near-term resistance level at 26,268 pts, defined from the high of 8 Nov. This is followed by the 26,966-pt record high.

Hence, we advise traders to maintain long positions, following our recommendation of initiating long above the 25,223-pt level on 3 Dec. For now, a new trailing-stop is preferably set below the 25,223-pt threshold as well in order to minimise the risk per trade.

Source: RHB Securities Research - 4 Dec 2018