Upside move remains intact; stay long. The E-mini Dow ended lower to form a black candle yesterday. It dropped 93 pts to close at 24,458 pts, after oscillating between a high of 24,608 pts and low of 24,386 pts. Based on the current technical landscape, the index has remained above the 21-day SMA line and the previouslyindicated 23,696-pt support for nearly two weeks, which implies that the buyers are still in control of the market. As the 21-day SMA line is likely to turn higher, this would also enhance the bullish momentum. Overall, we keep our bullish view on the E-mini Dow’s outlook.

Currently, the immediate support level is seen at 23,696 pts, ie the low of 14 Jan. The next support is maintained at 22,563 pts, which was the low of 4 Jan. Towards the upside, we anticipate the immediate resistance level at 24,844 pts, obtained from the high of 12 Dec 2018. The next resistance would likely be at 26,088 pts, ie the previous high of 3 Dec 2018.

Hence, we advise traders to maintain long positions, in line with our initial recommendation to have long positions above the 22,400-pt level on 27 Dec 2018. A trailing-stop is preferably set below the 23,696-pt threshold in order to secure part of the profits.

Source: RHB Securities Research - 25 Jan 2019