Bullish outlook stays unchanged. Today, we analyse the E-mini Dow’s longer-term trends based on its weekly chart. Last week, the index formed a long white candle, indicating persistent buying momentum. From a technical perspective, the index has marked a higher close vis-à-vis the previous weeks since late-Dec 2018, implying a positive sign. In addition, the index is now trading above the 50-week SMA line, implying that the bulls could be extending the upward momentum in coming sessions. Overall, we think that the rebound, which started from 26 Dec 2018’s low, may persist.

According to the weekly chart, we are eyeing the immediate support level at the 24,000-pt round figure. If a decisive breakdown arises, look to 21,452 pts – determined from the lowest point in 2018 – as the next support. To the upside, the immediate resistance level is now anticipated at the 26,966-pt record high. Meanwhile, the next resistance would likely be at the 28,000-pt psychological spot.

Overall, we advise traders to stick to long positions as signs of a significant reversal have yet to emerge. For more details, please refer to our 18 Feb report.

Source: RHB Securities Research - 19 Feb 2019