Upside swing is likely to continue; stay long. The E-mini Dow’s upward momentum continued as expected, as a white candle was formed last night. It rose 231 pts to close at 23,743 pts, off its high of 23,848 pts and low of 23,497 pts. On a technical basis, the bullish sentiment stays intact, as the index has recovered above the 21-day SMA line. Furthermore, this movement may further extend the rebound that started with 26 Dec 2018’s “Long White Day” candle. Overall, we expect the market to rise further if the immediate 24,086-pt resistance mentioned previously is taken out decisively in the coming sessions.

Presently, the immediate support is seen at 22,563 pts, ie the low of 4 Jan. If the price breaks down, look to 21,452 pts – determined from the low of 26 Dec 2018’s “Long White Day” candle – as the next support. On the other hand, we are eyeing the immediate resistance at 24,086 pts, ie near the high of 19 Dec 2018. Meanwhile, the next resistance is maintained at the 25,000-pt psychological mark.

Hence, we advise traders to maintain long positions, following our recommendation to initiate long above the 22,400-pt level on 27 Dec 2018. A trailing-stop can be set below the 22,563-pt threshold in order to minimise downside risk.

Source: RHB Securities Research - 9 Jan 2019