Maintain long positions. The E-mini Dow’s upside strength continued as expected, as another positive candle was formed last night. It gained 87 pts to close at 23,830 pts, after oscillating between a high of 23,966 pts and low of 23,712 pts. As the index has successfully marked a higher close vis-à-vis the previous sessions since 4 Jan – and posted a fourth consecutive positive candle in the process – this points to persistent buying momentum. Yesterday’s white candle can be regarded as a continuation of the bulls expanding the rebound from 26 Dec 2018’s “Long White Day” candle. Overall, we remain positive on the index’s outlook.

According to the daily chart, the immediate support level is maintained at 22,563 pts, determined from the low of 4 Jan. The next support is seen at 21,452 pts, ie the low of 26 Dec 2018’s “Long White Day” candle. To the upside, we anticipate the immediate resistance level at 24,086 pts, situated near the high of 19 Dec 2018. If a breakout arises, the next resistance is seen at the 25,000-pt round figure.

Thus, 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. In the meantime, a trailing-stop can be set below the 22,563-pt threshold in order to limit the risk per trade.

Source: RHB Securities Research - 10 Jan 2019