Stay long. Following the long white candle seen on 15 Feb, the E-mini Dow ended on a “Doji” candle last night. It settled at 25,883 pts, after hovering between a high of 25,957 pts and low of 25,789 pts throughout the session. Still, the bullish sentiment stays intact as this “Doji” candle can only be viewed as buyers probably taking a breather after the recent surge. Given that the index is still trading above the rising 21-day SMA line, this implies that the upside swing that began with 8 Feb’s “Hammer” pattern may carry on. Overall, we remain upbeat in our E-mini Dow outlook.

As seen in the chart, we maintain the immediate support level at 24,862 pts, ie the low of 8 Feb’s “Hammer” pattern. If a breakdown occurs, the next support is anticipated at 24,284 pts, which was near the lows of 23 and 28 Jan. Towards the upside, we are eyeing the immediate resistance level at 26,268 pts, obtained from the high of 8 Nov 2018. Meanwhile, the next resistance is seen at the 26,966-pt record high.

Hence, we advise traders to maintain long positions, given that we initially recommended initiating long above the 22,400-pt level on 27 Dec 2018. In the meantime, a trailing-stop can be set below the 24,862-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 20 Feb 2019