Stay long while setting a trailing-stop below the 25,275-pt support. The E-mini Dow formed a black candle last night. It lost 217 pts to close at 25,814 pts, off its high of 26,171 pts and low of 25,605 pts. Market sentiment remains bullish as the index has continued to remain above the rising 21-day SMA line and the 25,275-pt support mentioned previously. From a technical perspective, as long as the E-mini Dow does not erase the gains from 15 Feb’s long white candle, there is a possibility that the upside move would continue. Overall, we remain bullish on E-mini Dow’s outlook.

As seen in the chart, we maintain the immediate support level at 25,275 pts, ie the low of 15 Feb’s long white candle. The next support would likely be at 24,284 pts, determined near the lows of 23 and 28 Jan. Towards the upside, we are eyeing the immediate resistance level at 26,268 pts, ie the high of 8 Nov 2018. If a decisive breakout arises, the next resistance is seen at the 26,966-pt record high.

Hence, we advise traders to maintain long positions, since we initially recommended initiating long above the 22,400-pt level on 27 Dec 2018. A trailing-stop is advisable to set below the 25,275-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 5 Mar 2019