Stay long while setting a new trailing-stop below the 22,563-pt support. The E-mini Dow formed a “Doji” candle last night. It settled at 23,512 pts, after hovering between a high of 23,668 pts and low of 23,279 pts throughout the day. From a technical perspective, the index has marked a higher close vis-à-vis the previous sessions since 4 Jan. This indicates that the rebound, which took place from 26 Dec 2018’s “Long White Day” candle, may persist. Overall, we keep our positive view on the E-mini Dow’s outlook.

Based on the daily chart, we anticipate the immediate support at 22,563 pts, which was the low of 4 Jan. Meanwhile, the crucial support is maintained at 21,452 pts, ie the low of 26 Dec 2018’s “Long White Day” candle. To the upside, the immediate resistance is seen at 24,086 pts, determined near the high of 19 Dec 2018. The next resistance is situated at the 25,000-pt psychological spot.

Therefore, we advise traders to stay long, in line with our initial recommendation to have long positions above the 22,400-pt level on 27 Dec 2018. For now, a new trailing-stop can be set below the 22,563-pt threshold in order to limit downside risk.

Source: RHB Securities Research - 8 Jan 2019