Initiate long positions above the 26,000-pt level. The E-mini Dow ended higher to form another white candle last night. It rose 325 pts to close at 26,258 pts, off its high of 26,288 pts. From a technical perspective, as the index has breached above the 26,238-pt resistance mentioned previously – and formed a third consecutive white candle – this indicates that market sentiment is turning bullish. The latest white candle can also be viewed as a continuation of the bulls extending the rebound from 8 Mar’s “Hammer” pattern. Yesterday’s close has also triggered our stop-loss, which we had previously recommended at the 26,238-pt threshold.

Judging from the current outlook, the immediate support is seen at the 26,000-pt psychological mark. If a breakdown arises, the next support is anticipated at 25,213 pts, determined from the low of 8 Mar’s “Hammer” pattern. On the other hand, we are eyeing the resistance at the 26,966-pt historical high. This is followed by the 27,000-pt round figure.

Therefore, we advise traders to initiate fresh long positions above the 26,000-pt level. At the same time, a stoploss set below the 25,213-pt threshold is preferable to minimise the downside risk.

Source: RHB Securities Research - 2 Apr 2019