Maintain long positions while setting a trailing-stop below the 24,862-pt support. Upward momentum on the E-mini Dow has continued as expected, as a white candle was formed last night. It gained 81 pts to close at 25,964 pts, after oscillating between a high of 25,985 pts and low of 25,825 pts. The upside move is likely to continue, given that the index has marked a higher close above the rising 21-day SMA line. In view of last night’s higher close, the E-mini Dow may further extend the upside swing that started from 8 Feb’s “Hammer” pattern. Overall, we remain bullish on the index’s outlook.

As shown in the chart, the immediate support level is seen at 24,862 pts, which was the low of 8 Feb’s “Hammer” pattern. The next support would likely be at 24,284 pts, determined near the lows of 23 and 28 Jan. On the other hand, we anticipate the immediate resistance level at 26,268 pts, ie the high of 8 Nov 2018. If a breakout arises, the next resistance is maintained at the 26,966-pt historical high.

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. A trailing-stop is advisable to set below the 24,862-pt threshold in order to lock in part of the profits.

Source: RHB Securities Research - 21 Feb 2019