Bullish sentiment remains unchanged; stay long. The E-mini Dow formed a “Doji” candle last Friday. It settled at 24,996 pts, after hovering between a high of 25,143 pts and low of 24,933 pts throughout the day. We note that the index is still trading above the rising 21-day SMA line and the 24,000-pt support as mentioned previously, which suggests that the positive sentiment remains intact. Meanwhile, the 14-day RSI indicator is now rising higher without being overbought – this has enhanced the positive sentiment. Overall, we keep our bullish view on the E-mini Dow’s outlook.

As seen in the chart, the immediate support is seen at the 24,000-pt round figure, situated near 10 Jan’s high and 17 Jan’s low as well. If this level is taken out, look to 22,563 pts – ie the previous low of 4 Jan – as the next support. Towards the upside, we maintain the immediate resistance at 25,500 pts, set near the midpoint of 4 Dec 2018’s long black candle. The next resistance would likely be at 26,088 pts, which was the previous high of 3 Dec 2018.

Hence, we advise traders to stay long, following our call to initiate long above the 22,400-pt level on 27 Dec 2018. A trailing-stop can be set below the 24,000-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 4 Feb 2019